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While it still has a long way to go before fully coming into effect, the agreement was received with optimism by Brazilian beef exporters, but grain and oilseeds players told Fastmarkets that they see little change as the main products exported to the UE already have zero tax.
The deal still requires the consent of the European Parliament before it can formally be concluded. It is expected to be signed on January 17 and will need to be approved by the congresses of all Mercosur member countries: Argentina, Brazil, Paraguay, and Uruguay. The EU is Mercosur’s second-largest trade partner, accounting for almost 17% of Mercosur’s total trade in 2024.
Under the EU-Mercosur trade agreement, Mercosur members will be allowed to export up to 99,000 tonnes of beef per year combined, subject to an initial tariff of 7.5%.
Currently, Brazilian beef exports to the EU face tariffs of either 20% or 12.5%, depending on the product. These tariffs are set to be eliminated once the agreement is signed. The 20% tariff applies to the Hilton quota, a high-quality beef import quota, with Argentina and Brazil being the main suppliers, holding quotas of 29,500 tonnes and 10,000 tonnes respectively.
When contacted by Fastmarkets, Brazil’s beef exporters association (ABIEC) said it will issue an official statement the following week.
Brazilian consultancy Safras & Mercado analyst Fernando Henrique Iglesias said beef trade flows were already being reshaped by recent Chinese safeguards on beef imports, which imposed import quotas and tariffs on volumes exceeding pre-determined limits.
“The EU–Mercosur trade deal should add value to Brazilian exports. The price per tonne is expected to be higher than what is currently paid, since the EU usually pays more,” he said.
Iglesias added that European livestock conditions, which are currently in “clear decline”, should boost importing needs and contribute to higher Brazilian exports. “It shouldn’t be such a significant increase, but some growth is expected for the current year”, he said.
StoneX animal protein analyst Larissa Alvarez said the EU-Mercosur deal offers an opportunity following China’s safeguard measures.
“Part of the tonnage that falls outside China’s quota could be redirected to other destinations that pay better, such as some European countries,” she said.
With global demand remaining firm during a time when the world’s three largest producers – Brazil, the US, and Australia – are cutting output, new markets such as Europe could provide additional support or even upward pressure on prices in 2026, according to the Alvarez.
For poultry, the agreement does not alter the existing quota between Brazil and the EU: 15,050 tonnes are tariff-free, with an additional charge of 1,024 euros per tonne for volumes exceeding the quota.
However, the trade deal introduces a new tariff-free limit of 180,000 tonnes for all Mercosur countries combined. This quota will be phased in over six equal annual stages, with progressively increasing volumes until the annual cap is reached.
The Brazilian Animal Protein Association (ABPA) said in a statement that the deal represents a significant step toward commercial predictability and stronger relations between the blocs, with gradual and well-defined impacts on the animal protein sector.
“Positive economic impacts will be gradual, following the implementation schedule and subject to strict compliance with sanitary and regulatory requirements, as well as safeguard rules, which should remain strictly technical and exceptional,” ABPA said.
Analyst Juliana Pila from local consultancy Scot told Fastmarkets that the agreement improves access and provides predictability for Brazil’s poultry market, which is already a regular supplier to the EU.
“On the other hand, the quotas are unlikely to generate a major increase in export volumes, given the strict sanitary and environmental requirements that exclude some companies from this market,” Pila said.
The Brazilian Association of Vegetable Oil Industries (Abiove) told Fastmarkets that it would not provide new comments on the approval of the EU-Mercosur trade deal, but reiterated the position from a statement released in December that the European Union already applies zero tariffs to imports of soybeans and soymeal originating from Brazil, as well as that this treatment has been in place for many years and there has been no recent change on this point.
“For this reason, the Mercosur-European Union agreement does not alter the tariff scenario for these two products. Both already enter the European market without tariffs; there are no reduction stages or elimination schedules planned for soybeans and soymeal within the agreement,” the association said.
Brazilian oilseed and grain exporter association Anec has yet to comment on the approval of the trade deal and its effects.
“Honestly, I think we’ll have to wait and see what happens. Since the agreement won’t come into full effect because there are still several other bureaucratic steps to go through, I believe the immediate impact will be minimal from a practical standpoint,” Brazilian agricultural consultancy AgRural grains and oilseeds analyst Daniele Siqueira said.
According to independent analyst Javier Preciado Patiño, the geopolitical scenario in which the agreement was conceived in is very different from the current one, and the economic bloc is known for its bureaucracy regarding trade agreements.
“Except for a few products, Argentina’s agribusinesses’ exports are directed elsewhere: Vietnam, India, China, the Middle East, Africa, Southeast Asia, and Latin America. Bilateral agreements, for example, with the US or India, are more beneficial to us than this agreement,” Patiño told Fastmarkets.
“Clearly, if it is convenient for Brazil, it is not for Argentina, since we are competitors in everything: meat, cereals, oilseeds,” he added.
Nevertheless, the response to the news was overall positive in Argentina, with both producers and industry representatives welcoming the progress.
“We welcome the European Council’s decision to finally approve it and put aside political prejudices that have no economic basis,” local oilseed crushing and export chamber Ciara-CEC president Gustavo Idigoras told Fastmarkets.
“For the cereals and oilseeds sector, it has few benefits, and import duties on soybean and sunflower oil in the EU will only be eliminated from year seven, and in year 10 for biodiesel. In any case, it has regulatory value because it creates predictability in European environmental, social, and health rules”, Idigoras added.
The Argentine Agribusiness Council said it hopes that the European Parliament will ratify it as soon as possible and urged the congresses of the Mercosur member countries to act similarly, so that implementation can be effective as soon as possible.
Meanwhile, in Europe, farmers – particularly in France – had long protested against the agreement, fearing its impacts on local agriculture.
“Despite the latest adjustments to the additional safeguard measures, European farming and agri-cooperative organizations remain unanimous and united in denouncing a deal which remains fundamentally unbalanced and flawed in its core,” European farmers group Copa said in a statement.
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