Negotiations on the EU/Mercosur free trade agreement (FTA) started in 1999 but stalled before eventually being concluded in June 2019. However, that agreement was not adopted because of concerns amongst EU countries about market access and issues relating to environmental sustainability. In response, in 2023, the Commission sought to address these issues in a new round of discussions with the Mercosur bloc resulting in an agreement reached on 6 December 2024. This included a commitment to effectively implement the Paris Agreement on Climate Change and commitments to preserve the biodiversity of ecosystems and tackle deforestation.

On Friday 9th January 2026, the Council approved the EU-Mercosur deal by qualified majority, following the introduction of a safeguard mechanism for agricultural products and a last-minute budgetary concession by the European Commission. The budgetary proposal would see earlier access to €45 billion of agricultural funds allocated in the EU’s next long-term budget.

What does the agreement mean for agriculture?

The agreement has divided opinion amongst EU countries. Mercosur countries enjoy a competitive advantage over EU farmers in terms of scale and cost of production, and farmers in many EU countries are concerned about the impacts that additional imports from Mercosur will have on their profitability.  The Commission has sought to address this in the agreement by limiting preferential access for the most sensitive products:

Product	Quantity	Remarks
Beef	99,000 t	7.5% import duty. 55% of quota for fresh/chilled, 45% frozen product
Pigmeat	26,500 t	Of which 1,500 t reserved for Paraguay. 83 EUR/t and phased in over 5 years.
Poultry	180,000 t	Duty free and phased in over 5 years. 50% boneless and 50% bone-in.
Sugar	180,000 t	Raw cane sugar for refining from Brazil, included in existing EU WTO quota
Sugar	10,000 t	Raw cane sugar for refining from Paraguay
Ethanol	650,000 t	200,000 t for all uses and 450,000 t for use in the EU chemical industry.
Honey	45,000 t	Duty free and phased in over 5 years
Rice	60,000 t	Duty free and phased in over 5 years
Maize and sorghum	1,000,000 t	Duty free and phased in over 5 years
Garlic	15,000 t	Phased in over 7 years
Sweetcorn	1,000 t	Duty free
Eggs	3,000 t	Duty free and phased in over 5 years. Must be compliant with the EU’s Laying Hens Directive.
Egg albumins	3,000 t	Duty free and phased in over 5 years
Cheese	30,000 t	Phased in over 10 years
Milk powders	10,000 t	Phased in over 10 years
Infant formula	5,000 t	Phased in over 10 years

All imports into the EU under the agreement must comply with the EU’s high food safety standards, whilst reaffirming the “precautionary principle” that both sides are free to adopt measures to protect human, animal and plant health, including in situations where scientific information is inconclusive. 

According to the Commission, EU agri-food exports to Mercosur were worth €3.2 billion in 2023, and the agreement will help increase this trade as Mercosur countries eliminate high tariffs on key EU export interests, including for dairy, malt, wine and spirits, chocolate and processed food products.

Safeguards

As part of the overall agreement, the EU has agreed a bilateral safeguard mechanism that aims to strengthen protections for farmers, in the EU and Mercosur, against an influx of imports that are causing or could cause serious injury to the domestic industry during the 12-year transition period.

Under the mechanism the Commission is required to present monitoring reports to the Parliament every 6-months that assess the impact of imports that benefit from preferential access on sensitive products.

The safeguard measure is triggered for sensitive products where there is risk of serious injury to the domestic industry. Serious injury is measured as when there has been a 5% or more increase in import volume year-on-year or a 5% or more decrease in the average import price year-on-year. For non-sensitive products, an investigation must be requested by an EU Member State or representation body for union industry.

An investigation can take up to 4-months for sensitive products and up to 6-months (extendable) for other products.  Where it is found that there has been serious injury, the safeguard measures available include a suspension of further reductions in customs duty or an increase in the rate of customs duty.

What about environmental concerns?

The EU-Mercosur partnership agreement embodies a shared commitment to sustainable development to promote the green transition and ensure the protection of labour rights. It includes a dedicated Trade and Sustainable Development chapter under which the EU and Mercosur commit to effectively implement the Paris Climate Agreement and to cooperate on the climate aspects of trade. The Paris Agreement on Climate Change is an “essential element” of the agreement, which means that either side can suspend the agreement if it considers that there is a serious breach of the Paris Agreement, or if a party leaves the Paris Agreement. It covers, for example, a pledge by: 

• the EU and Mercosur countries to move towards climate neutrality by 2050.
• the EU to reduce its domestic emissions by at least 55% by 2030 compared to 1990 levels.
• Brazil, in its nationally determined contribution, to halt illegal deforestation, including in the Brazilian Amazon.

Under the agreement, EU legislation such as the EU Deforestation Regulation continues to apply to products imported under the agreement, ensuring that no commodities associated with deforestation are placed on the EU market. It also includes a binding commitment to combat illegal logging and to tackle deforestation.

The Trade and Sustainable Development chapter of the agreement is subject to a specific dispute settlement procedure. Should either the EU or Mercosur believe that the other side is not adhering to the rules, they can ask for formal government consultations. If the situation is unresolved, an independent panel of experts can be asked to examine the matter and draw up a report with recommendations, to be made public so that it can be followed up by stakeholders and relevant institutions on both sides.

What next?

European Commission President, Ursula von der Leyen, is expected to travel to Paraguay on 17 January to sign the agreement on behalf of the EU.

Before the deal can fully enter into force and be formally concluded by the Council, the European Parliament will need to approve the deal, and it will need to be ratified by Mercosur countries. The timeline leading to the eventual implementation of the agreement is not clear at this stage.