The Mercosur and the European Union have finalized a free trade agreement between the blocs after more than two decades of negotiations. The official confirmation came on Friday (6th) during the leaders’ meeting at the Mercosur Summit in Montevideo, Uruguay.
The pact will significantly boost agricultural exports from Mercosur countries to Europe. “In general terms, the EU will have to eliminate tariffs on 82% of agricultural imports from Mercosur and provide preferential access with reduced tariffs for 97% of products,” said José Luiz Pimenta Júnior, Director of International Trade and Government Relations at BMJ Associados, in an interview with Brazilian magazine Exame.
Mercosur, composed of Argentina, Brazil, Paraguay, and Uruguay, stands out in the grain and livestock sectors. The South American bloc accounts for over 15% of global production in just six products, including soybeans and derivatives, sugarcane, sunflower, coffee, cassava, and beef.
Together, the blocs gather approximately 718 million people and economies totaling around USD 22 trillion.
The announcement of the agreement on Friday does not mean it will automatically come into effect. The treaty must still be voted on by the European Council (comprising the heads of State), the European Parliament (a congress of elected members representing EU countries), and the legislative bodies of all EU and Mercosur countries. No final deadline has been set for these steps.
Advantages for the meat trade
The agreement allows Mercosur to export a new quota of 99,000 tons of beef to the EU, divided into 55% chilled beef and 45% frozen beef, with an in-quota tariff of 7.5%. This volume will be reached in six stages, with 42.5% (42,075 tons) allocated to Brazil.
Additionally, the Hilton Quota of 10,000 tons will become tariff-free once the treaty is enacted – the current rate is 20%.
The agreement also establishes a new quota for chicken exports, totaling 180,000 tons of carcass-equivalent weight (50% bone-in and 50% boneless meat) with zero tariffs for shipment to the EU. This quota will be phased in over six years (30,000 tons in the first year, 60,000 tons in the second, reaching 180,000 tons in total).
A pork export quota of 25,000 tons is also included, with a gradual implementation similar to chicken over six years and a tariff of EUR 83 (USD 87) per ton.
Next steps
The ratification of the agreement faces resistance from some European countries, particularly France and Poland. On the other hand, Germany and Spain are openly supportive, especially following Donald Trump’s election in the United States, which threatens global trade.
The internal approval processes differ between the blocs. In Mercosur, each of the member countries’ parliaments must review and approve the text.
In the EU, approval requires votes from the European Council and the European Parliament, representing all member states. According to experts, this could be the most challenging stage, as it requires a qualified majority consensus within the bloc.