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The EU-Mercosur trade deal, signed in January, is set to take provisional effect from May 1, 2026, after the European Commission completed its final procedural step.The Commission completed its provisional application of the interim trade agreement (ITA), on Monday March 23, by sending its “note verbale” to Paraguay, the formal guardian of the Mercosur treaties.
Three of the four other Mercosur members have now ratified the broader partnership agreement.
The deal, which covers EU member states and Mercosur countries, Argentina, Paraguay, Uruguay, and Brazil, has set goals to reduce trade barriers and increase market access between the two regions.
While the agreement has been welcomed by trade associations promoting free trade, it still faces significant opposition by environmental groups and concerns over agricultural EU competition.
Fastmarkets spoke to Bernard Lombard, Trade and Industrial Policy Director, Cepi, for insight on which forest products will be affected.
According to analysis by Cepi, the consequences of the EU-Mercosur deal on pulp and paper exports will be phased in over several years rather than taking effect immediately.
Lombard stated that no tariffs on pulp, paper and board products will be removed at entry into force, with most reductions phased in over 4 to 15 years, while some products remain excluded.
By the end of the transition period, around 85% of EU pulp exports by volume and 90% of paper and board exports by volume will benefit from tariff elimination.
Converted paper and board products, however, remain heavily protected, with only 54% of EU exports by value set to be liberalized. Printed products will see the highest level of liberalization, with 93% of EU exports by value expected to gain tariff-free access to Mercosur markets.
While the EU has applied zero import tariffs since 2004 on pulp and paper products, Mercosur countries have maintained their own duties, creating an uneven trading landscape.
Lombard added that given the EU has already removed its import tariffs for more than 20 years, the agreement should not lead to any significant surge in pulp and paper imports from Mercosur countries.
Fastmarkets analyst Rafael Barisauskas commented further on the impact of the deal for European markets.
Barisauskas said that the agreement does not eliminate tariffs across all products, with reductions applied on a sector-by-sector basis, but it is expected to create incremental demand for packaging materials through increased exports of higher-value goods such as food products, manufactured items and animal proteins.
While Mercosur trade remains largely commodity-focused, European producers, particularly in higher-value sectors like chemicals and processed goods, are likely to witness modest growth in boxboard and containerboard demand over time, rather than a significant market shift.
The agreement continues to face significant opposition, particularly from environmental non-government organizations (NGOs) such as Greenpeace, which argue that the EU-Mercosur agreement could undermine the implementation of the European Union Deforestation Regulation (EUDR) while weakening other EU safeguards.
Greenpeace made a statement, saying the deal “would be particularly harmful for the Amazon rainforest, at a time when the EU’s anti-deforestation law has already been repeatedly delayed and diluted.”
The successive delays have intensified scrutiny over whether the EU can effectively uphold its environmental standards while expanding trade ties with Mercosur countries.
Commenting on the EU’s position on free trade principles, Lombard said that “the provisions of the EUDR have to be met independently, regardless of bilateral trade agreements by operators in the EU and from third countries”.
Concerns are also linked to the structure of the agreement itself. While it includes a strengthened Trade and Sustainable Development (TSD) chapter committing parties to halt deforestation, criticisms have pointed to the enforcement mechanisms remaining weaker than those applied to core trade provisions.
The deal has also faced challenges with political resistance from countries within the EU, including Italy and France, with the main concerns surrounding farming and agricultural groups.
European farmers have raised concerns that the deal could expose them to lower-cost imports, particularly in beef, poultry, and sugar, where Brazil and Argentina are globally competitive exporters.
As previously reported by the Fastmarkets agricultural team, the impact of the EU-Mercosur trade agreement on South American agricultural and biofuel exports to Europe are uncertain and not expected to be very expressive in the near term.
But Brazil’s meat exports to the block could be bolstered, as sources told Fastmarkets in the beginning of the year when the deal was approved by the European Union.
While the agreement will not bring major changes to the current situation in terms of tariffs applied over grains and oilseeds, the reduction of tariffs on vegoils and biodiesel are only scheduled to be enforced further down the line, in years seven and 10 of the agreement respectively.
As for meat exports, industry associations and analysts believe Brazil could benefit from the deal by both increasing the volume and unit value of its exports into the block.
The deal is further expected to have limited immediate impact on the grains and oilseeds sector, because existing trade flows are already well established and driven primarily by price and quality rather than tariffs.
Argentina has supplied around 55% of EU corn imports over the past five years, while Brazil accounts for roughly half of soybean imports, according to European Commission data.
For more in-depth analysis and the latest price data on the pulp, paper and agricultural markets, explore Fastmarkets’ range of commodity insights today. Speak to our team.