On January 9, most EU member states approved the long-negotiated trade agreement with Mercosur, igniting major protests from European farmers. The deal could reshape agricultural markets by lowering import duties for Latin American goods. Many in the sector fear tough new competition and question the fairness of the agreement.
In general, the trade agreement by the EU with the Latin American Mercosur countries (Brazil, Argentina, Uruguay and Paraguay) focuses on eliminating as many import duties as possible – and thus to increase trade between the blocs. A 5th Mercosur member, Bolivia, may join the deal in the years to come. Import duties will be largely phased out for machinery and equipment, and for chemicals and pharmaceuticals, for example.
A planned deal was announced in 2019 after 20 years of negotiations. Late 2024 the agreement was formally announced; what still needed to happen was ratification by most of the member states. That happened in January 2026.
Farmer concerns intensify
The deal has been a major concern for European farmers for years. Producers throughout Europe fear significant pressure on the European market for meat and sugar, among other things, due to cheaper imports from Latin America.
European agricultural organisations have stated that this is unfair competition, because farmers in those countries do not have to comply with the same regulations as European farmers, for example, regarding animal welfare and the use of pesticides.
Quotas built up over 5 years
Agriculture has been designated as a “sensitive sector” in the negotiations on the EU-Mercosur agreement. As a result, quotas have been agreed upon for several products. That does not mean, however, that the volumes of these quotas will immediately be released onto the market next year; the quotas will be built up gradually, usually over a period of 5 years.
There are different perspectives on these quotas. The EU generally emphasises the totals being a percentage compared to total European production, which often seems relatively small. European producers, however, tend to make a different kind of calculation and point to a cumulative effect of all those agreements together.
Meat sector market impact
For example, in the deal, Mercosur countries will ultimately be allowed to import 99,000 tons of beef at a reduced tariff. That would represent 1.5% of total European production, according to the EU. Impact calculations by Wageningen University & Research (WUR), have stated that Mercosur’s impact on beef production in the Netherlands is greatest. The calculation suggests that the production value of beef in the Netherlands would be 15.6% lower by 2040.
For pork, a quota of 25,000 tons has been allocated that is subject to a reduced tariff. This equates to 0.1% of total European production.
A levy-free quota of 180,000 tons has been set for poultry, equivalent to 1.3% of total European production per year, said the Commission.
The European poultry organisation Avec, however, put the quota in a different perspective, stating that 9% of the poultry consumed in the EU will soon be imported. Even now, even without Mercosur, more than 25% of the breast fillet consumed by Europeans comes from non-EU countries, Avec said.
190,000 tons of sugar duty-free
It has been agreed that 190,000 tons of sugar may be exported duty-free to the European Union. Unlike the other quotas, there is no initial period here; this full quota applies immediately for the 1st year that Mercosur officially comes into effect. The European sugar industry warns that this quantity is equivalent to the annual production of an entire factory in Europe, and that the biggest problem lies in the accumulation of sugar: duty-free sugar has already been entering the European market through other agreements.
Conversely, quotas for certain products will also remain in place in the Mercosur countries. Dairy is a particularly sensitive area. For exports to the Mercosur region, a maximum of 10,000 tons of milk powder will be introduced, a 5,000-ton baby food quota, and a 30,000-ton cheese quota. The European dairy industry sees opportunities in this area. The new cheese quota is 10 times the amount of cheese currently exported to Mercosur countries, according to the European Dairy Association.
Protected European regional product names
Part of the agreement with Mercosur countries also includes the official protection of many European regional product names in South American countries. Imitations of these names will then be prohibited.
Eggs duty-free under certain conditions
A special agreement has been made in Mercosur regarding eggs. Other products must meet European food safety requirements. For example, residues exceeding European standards must not be found on these products. An additional requirement applies to fresh eggs: they may only be imported duty-free if production also complies with European animal welfare regulations for laying hens.
That is unique; animal welfare regulations are normally not considered in free trade agreements. At the same time, the requirement is only stipulated for fresh eggs, not the most controversial part of the agreement.
At the last minute, a “safety mechanism” was added in autumn 2025 to protect the European market. The idea is that if there are significant price fluctuations as a result of additional imports from Mercosur, Europe can intervene. Agricultural organisations, however, believe this is insufficient.
Final ratification steps
The approval by the majority of member states doesn’t mean the entire ratification process is now done and dusted. There is one final step waiting: a vote in the European Parliament. That vote is expected to happen in February or March 2026. There is a considerable amount of opposition in the European Parliament, but it remains to be seen whether or not that will prove to be enough to block the final ratification step.
