What is the commercial impact of the Mercosur-European Union agreement?

After a long cycle of negotiations that extended from 1999 to 2024, the long-awaited agreement between Mercosur and the European Union (EU) is finally expected to be signed on January 17, 2026. Considered a historic milestone in economic relations between the two regions, the pact encompasses everything from cooperation commitments to specific trade measures, such as tariff reductions and the establishment of higher quotas for exports and imports.

Combining markets that together concentrate approximately 720 million consumers and represent about 25% of the global Gross Domestic Product (GDP), a reduction in trade barriers could generate significant gains for the member countries of the blocs. However, a detailed analysis of the negotiated treaty reveals that, despite its potential, it will have a limited commercial impact due to the persistence of very significant protectionist barriers.

According to a study conducted by researchers at Insper Agro GlobalEven with tariff reductions and increased preferential quotas, the European Union will continue to apply strict rules to the import of agricultural products from Mercosur, particularly from Brazil. There are also barriers on the Mercosur side, especially for industrial products.

The beef sector exemplifies this dynamic well: although the agreement foresees an expansion of preferential quotas for Mercosur, the additional intra-quota volume will only amount to 1,5% of the European market. Furthermore, tariffs outside these quotas remain high, inhibiting any significant expansion of Brazilian exports to the bloc.

In general terms, the study estimates an annual increase in European imports of Brazilian goods (of all items) of between US$1,2 billion and US$3,8 billion after the tenth year of implementation of the agreement, representing an estimated gain of between 2% and 7% in trade. The majority of these gains (approximately 60%) are expected to come from increased import quotas for agricultural products by Europe, particularly meat, sugar, ethanol, and grains.

The estimated impact on Brazilian imports from the European bloc, across all goods, was between US$5 billion and US$8 billion, starting in the tenth year of the agreement. This represents an annual increase of over 10% after that period, particularly for vehicles, machinery and equipment, cosmetics, and pharmaceuticals.

In practice, the agreement represents only a moderately open door to trade, allowing for occasional gains but without promoting a major revolution in relations between the blocs. Instead of significant liberalization, it is a regime of "controlled flexibility," which benefits some activities but still poses challenges.

Read the full study, presented at the 53rd ANPEC Congress. by clicking here.