Just the Facts | What is the EU-Mercosur Trade Agreement?

You can find our Mercosur update from March 2026 here.

On 6 December 2024, a political agreement was reached between the EU and the four founding members of Mercosur – Argentina, Brazil, Paraguay and Uruguay. This agreement, known as the EU-Mercosur Partnership Agreement is focused on trade, but also includes political dialogue and cooperation. Trade in goods and services between the EU and Mercosur countries is worth billions every year, making this agreement the biggest trade deal ever negotiated by the EU. However, it has also prompted significant criticism, particularly among EU agricultural associations, as well as civil society groups. The Irish government has also voiced its concerns and is opposed to the deal in its current form. The deal still needs to be ratified by at least 15 Member States, representing 65% of the EU population. This Just the Facts examines what exactly the EU-Mercosur deal entails and delves into some of its controversies in Ireland and across Europe. 

What is Mercosur? 

Mercosur stands for Mercado Común del Sur, or Southern Common Market in English. Mercosur is effectively a trading bloc of mainly countries in South America, originally founded in 1991 by Argentina, Brazil, Paraguay and Uruguay and later joined by Venezuela (2012) and Bolivia (2024). However, in 2016, Venezuela was suspended from Mercosur for failing to comply with democratic principles and for its deteriorating human rights record. Chile, Colombia, Ecuador, Guyana, Peru, Suriname, and most recently Panama are all associate members of Mercosur, meaning they do not have full voting rights or full access to member countries’ markets. Rather than being an organisation with supranational elements such as the EU, the Mercosur is fully intergovernmental. 

During the 1990s and up until 2010, it saw early success, with internal trade increasing tenfold from $4 billion in 1990 to more than $41 billion by 2010. Mercosur represents a total population of 273 million people and is the 6th largest economy outside the EU, with an annual GDP of €2.2 trillion.  

EU-Mercosur trade relations 

Together, the EU and Mercosur economies would potentially combine to create a market that accounts for nearly 25% of the world’s GDP. The EU is Mercosur’s top trade and investment partner, with exports totalling €56 billion in goods in 2023 and €28 billion in services in 2022. Exports from Europe to Mercosur come from towns and cities across the EU, including 83 companies in Ireland. More than 30,000 small EU companies export to the region. Additionally, the EU is the largest foreign investor in Mercosur, holding an investment stock of €340 billion in 2021.  

Currently, any trade relations between the EU and the four founding members of Mercosur are governed by bilateral framework trade and cooperation agreements, dating back to the 1990s, as well as by the Interregional Framework Cooperation Agreement between the European Community and Mercosur. This Interregional Framework Cooperation Agreement paved the way for negotiations on a bi-regional association agreement, which started in 2000 based on the 1999 Council of the European Union negotiating directives. 

The association agreement aimed to uphold democratic principles and human rights, built on three pillars: political and security partnership, economic and institutional cooperation, and a phased free trade area for goods and services, considering nationally sensitive products in the EU such as cars or beef. 

Negotiations were first launched on 28 June 1999 in Rio de Janeiro. However, such negotiations regarding a bi-regional agreement between the two trading blocs were conducted intermittently over a twenty-five-year period. In the 2000s, deadlocks occurred, resulting in the talks being suspended and then restarted in 2010. One of the reasons for suspension (in 2004, for example) was regarding mismatched ambitions concerning the agricultural sector. From 2016 onwards, with the shift to centre-right pro-business governments in Argentina in 2015 and in Brazil in 2016, there was renewed interest, and an exchange of new tariff offers was made between the EU and Mercosur. The momentum continued, and in 2019, against the global backdrop of the official departure of the UK from the EU, the first Trump administration, and a trade war between the US and China, the EU and Mercosur concluded a political agreement on the trade components of the deal. This was then complemented in July 2020 with the conclusion of negotiations of the political and cooperation components of the deal. 

This version of the deal sparked significant concerns from stakeholders, including multiple EU Member States, various NGOs, and farming associations, which ultimately prevented the signature and ratification of the agreement. Concerns included the policies of the Brazilian president at the time, Jair Bolsonaro, regarding deforestation in the Amazon and Cerrado forests, as well as his administration’s disregard for climate change and the rights of Indigenous People.  

The EU’s shift in focus towards the bloc’s open strategic autonomy and economic competitiveness led to a re-prioritisation of negotiations in 2023 and 2024. Concern over the growing influence of Chinese firms in South America has also fuelled renewed momentum on the EU side for a deal. The context of previous negotiations have led to the current iteration of the EU-Mercosur Partnership Agreement (agreed in December 2024) which is the result of a “delicate rebalancing of EU and Mercosur interests”.  

One of the key differences between the 2019 and 2024 agreements is that the 2024 deal places a stronger emphasis on sustainability and environmental protection, particularly through its enforceable commitments to the Paris Climate Agreement and anti-deforestation measures (Annex to trade and sustainable development). Nevertheless, many environmental NGOs remain steadfast in their opposition to the deal in its entirety, and certain Member states, including Ireland oppose it in its “current form”. 

What will the trade deal entail? 

The ultimate goal of the agreement is to increase bilateral trade and investment, and lower tariff and non-tariff trade barriers. 

Over a 10-year period, the deal will result in Mercosur removing import duties on 91% of imports from the EU, with longer phase-ins for sensitive products. Key industrial exports like cars, machinery, chemicals, and pharmaceuticals from the EU will benefit from substantial tariff reductions. For the automotive sector, Mercosur will progressively remove tariffs on passenger car imports, with a 15-year phase-in period for combustion engine cars and an 18-year transition for electric vehicles (EVs), but will immediately reduce tariffs on both to 25%. Additionally, tariffs on EU food and beverage exports, including wine, chocolate, and spirits, will be gradually phased out, while specific quotas will open up new opportunities for EU dairy exports like cheese and milk powder. 

With the agreement, the EU will remove tariffs on 92% of imports from Mercosur over the course of up to 10 years. However, high-value goods like beef, pork, poultry, and sugar will be subject to specific tariff rate quotas (TRQs). Notably, Mercosur will be able to export 99,000 tonnes of beef to the EU under a preferential tariff, marking the largest beef TRQ granted by the EU. Similarly, Mercosur will gain duty-free quotas for honey, rice, and ethanol, providing further market access. 

A major feature of the agreement is the inclusion of bilateral safeguards and a non-violation complaint mechanism, which allows either party to challenge measures that might undermine the agreement’s benefits. The safeguard mechanism will enable temporary protective measures if an unexpected increase in imports threatens domestic industries. In a meeting with the European Parliament’s Committee on International Trade (INTA) on 16 January 2025, Commissioner Šefčovič stressed that a financial reserve of at least €1 billion would be established for EU farmers as part of a contingency plan. To ensure fair competition, the agreement also protects geographical indications (GIs) for over 350 EU products (including products like wine and Parmigiano-Reggiano, for example), provides reciprocal access to public procurement markets, and includes provisions to support small and medium enterprises (SMEs). 

Controversy and criticism 

Impact on the EU agricultural sector 

In November 2024, farmers across the EU launched protests against the Mercosur agreement. In particular, there has been significant backlash in countries such as France, Ireland and Poland, but also in Spain. More recently, in February 2025, protests occurred with farmers from Czechia, Austria, Slovakia and Hungary. Farmers, in particular beef farmers, in the EU are primarily concerned about the impact of the deal on prices. Additionally, EU farmers have said that the deal is unfair concerning the difference in standards between the two regions. Copa Cogeca, one of the strongest interest groups for farmers in the EU, have said that Mercosur represents a “double standard” by tolerating practices in imports that fail to meet the stringent requirements imposed on the EU domestic market. Notably, there is a split in positioning in the supply chain of the agricultural industry regarding the deal, as those who will benefit from the Mercosur agreement will likely be the larger export companies such as Argentina’s JBS, as well as companies in the food processing sector, who will have lower tariff rates to pay.  

Impact of deforestation 

Over the course of negotiations, a coalition of more than 450 organisations from South America and Europe, including trade unions, social movements, animal activists and environmentalists have criticised the trade deal. Environmental groups such as Greenpeace and Friends of the Earth have fiercely criticised this iteration of the agreement, deeming it harmful for “people and for planet” and “set to fuel the climate and biodiversity crisis”. Environmental groups have also criticised the lack of transparency of the negotiations. Deforestation of the Amazon and the Cerado forests in Brazil is a major concern for these groups. They maintain that the deal will, in practice, accelerate the expansion of agricultural land through large-scale deforestation. Under the power of President Jair Bosenaro in Brazil, deforestation reached an all-time high in 2023. Additionally, organisations such as Client Earth argue that the EU and Mercosur countries may have conflicting interpretations as to whether the EU deforestation regulation could be subject to the new non-violation complaint mechanism. The European Commission strongly rejects claims the Mercosur trade deal would weaken the anti-deforestation rules.  

In an interview with RTÉ, Irish agricultural policy expert, Professor Alan Matthews, stated that there are 1,200 holdings in Brazil which are certified to export to the EU and none in the areas that are vulnerable to deforestation. These areas must comply fully with EU standards. However, when purchasing feeding animals, these holdings may purchase from farms that have recently been deforested, representing a loophole in the trade agreement.  

Animal welfare 

Animal welfare interest groups have said that the EU-Mercosur deal in its current form could “spell disaster for animals”. These groups state that, as the Mercosur countries often rely on intensive farming practices, the agreement will further fuel animal cruelty in these countries. While in the deal it is envisaged that EU and Mercosur countries will work more closely through the framework of dialogues to raise animal welfare standards, animal welfare interest groups say that this is insufficient. They call for the EU to apply its own animal welfare conditions on imports of beef and chicken meat. 

Irish position on Mercosur 

Beef farmers in Ireland are concerned about the impact of the quota of 99,000 tonnes of beef, which they maintain will drive prices of beef down in the EU.  Normally, the tariff on imported beef is around 40% to 45%. With the deal, a tariff rate quota would allow a limited amount of beef at a lower tariff rate – in this case 7.5%. There will be two tariff rate quotas for beef – 55,000 tonnes for fresh beef and 44,000 tonnes for frozen beef. The beef tariff quota for Mercosur will represent 1.6% of total EU beef consumption. Irish beef farmers are most concerned about the fresh beef quota as this is the quota which concerns high value cuts.   

Mercosur already exports between 100 and 110 tonnes of fresh beef annually, with some of this already coming under two other different tariff rate quotas. Mercosur countries also export beef out of quota arrangements (known as over quota imports), i.e. the full tariff is paid by Mercosur and yet demand still remains for the product in the EU. It is thought that export companies will simply substitute their over quota exports for the new tariff rate quota. 

Certain Irish experts in European Agricultural Policy have said that the deal will have a marginal impact on beef prices as Mercosur countries will not have complete duty free access to the European market. In an interview, with RTÉ, Professor Alan Matthews explained that there will not be an increase in imported beef, but rather a substitution of over quota tariff exports for exports under the new tariff. This will result in 10,000 tonnes extra maximum in quota – and not the 99,000 tonnes, which would be the official tariff rate quota. 

Irish MEPs from the EPP, Renew and the Left have all voiced their opposition to the deal. The 2025 Programme for Government states that the Irish Government will “work with like-minded EU countries to stand up for Irish farmers and defend our interests in opposing the current Mercosur trade deal”. In March 2025, the Irish Minister for Agriculture, Food, Fisheries and the Marine, Martin Heydon, said that the Mercosur deal has been economically “adjudged” to cost the Irish beef sector €50 million, but that it is figure that the beef sector could potentially “manage”. He stated that the inconsistency on “environmental regulation” between the EU and the Mercosur countries is a “bigger issue” than the economic impact on Ireland’s beef sector. 

Reaction in South America 

The deal has elicited a spectrum of reactions across South America. While South American agricultural sectors have largely welcomed the deal, anticipating expanded market access, they remain cautious, emphasising the need to scrutinise the agreement’s detailed provisions. Concerns persist regarding potential environmental stipulations. In countries like Argentina and Paraguay, leaders acknowledge the agreement’s potential to enhance competitiveness but agricultural representatives stress the importance of a thorough review of its terms.  

The EU-Mercosur deal has been met with concern by Indigenous and rural communities, trade unions, environmental activists and human rights organisations. Indigenous groups have significant concerns about the potential impact on their land and territorial rights, livelihoods, the environment and biodiversity and cultural heritage. Indigenous leaders and other civil society groups have also criticised the lack of transparency in the negotiations and argue that the agreement could exacerbate the challenges they already face, particularly regarding land grabbing and environmental degradation.  

Next steps 

The legal basis of the text of the EU-Mercosur Partnership Agreement is still unknown. This means that several ratification scenarios are possible, depending on what type of agreement is established – a single mixed agreement; an interim EU-only agreement and final mixed agreement; and a scenario where the agreement is split into separate EU-only and mixed agreements. Importantly, mixed agreements not only require Council ratification and European Parliament consent but also ratification by the EU Member States.  

After its legal review and translation into all official EU languages, the Commission will submit to the Council proposals for Council decisions to sign and conclude the EU-Mercosur Partnership Agreement. These Commission proposals are expected in mid-2025 (most likely summer) and will essentially reveal which legal basis the agreement will have and thus how it will have to be ratified.  

In the case of a mixed agreement, similar to the trade agreement that the EU has with Canada, the deal will still need to be ratified by at least 15 Member States, representing 65% of the EU population – a process known as qualified majority voting (QMV). France and Poland have signalled intentions to vote against the deal, while Italy has voiced significant concerns, along with Ireland, the Netherlands and Belgium.