The trade agreement between Mercosur and the European Union (EU) presents limited immediate benefits for Brazilian agribusiness and tends to deepen the productive division in the countryside, restricting gains to a minority portion of capitalized producers. Analysts interviewed by Broadcast Agro assess that the combination of restricted quotas with an increase in non-tariff barriers – especially environmental ones – should only favor large exporting companies, to the detriment of smaller-scale producers.
For the researcher and professor at Insper Agro Global, Leandro Gilio, in the animal protein sector, the volumes approved in the treaty – 99 thousand tons for beef and 180 thousand for poultry – represent a reduced fraction, between 1.5 points and 2 percentage points, of the European consumer market. He assesses that these quotas should be accessed primarily by “big players”, the only ones with the capacity to meet the complex licensing processes and compliance costs required by the bloc.
“The quotas greatly limit any effect of the agreement, even more so considering that Brazil exported more than 3 million tons of meat in 2025. It is likely that this gain will only be for large companies that can meet these requirements and will not be something sought by medium-sized slaughterhouses”, says Gilio.
Take advantage of the stock market rise!
The professor of Agricultural Economics at Fundação Getúlio Vargas (FGV), Alexandre Mendonça de Barros, corroborates the analysis and defines the effect on the sector as “very small”. For the economist, the treaty imposes a “sea of restrictions” and works more as an instrument of pressure for subsidies from European farmers than as an effective trade opening.
Technical barriers
The implementation of the agreement poses operational challenges that go beyond tariff issues. The main obstacle is adapting to the EU’s internal rules, with emphasis on the European Regulation on Deforestation-Free Products (EUDR), scheduled to come into force at the end of 2026.
The independent specialist in Brazil-European Union relations for the environment and production chains, Giselle Galdi, warns that the requirement will require robust traceability systems and “due diligence” with geolocation. According to her, for the cattle market, adaptation will require individual traceability, surpassing the batch control model prevalent in Brazil. “The biggest risk is the combination of current internal EU rules, such as health and animal welfare standards, with political scrutiny over agro chains”, says Galdi.
Continues after advertising
For Gilio, this situation worsens the scenario of a “two-speed agriculture”. The researcher notes that less than 5% of producers concentrate investments and productivity, while small owners without resources for certification and georeferencing run the risk of exclusion from the international market.
Galdi highlights that, although Brazil approved the Reciprocity Law in 2025 – an instrument that allows it to respond to discriminatory measures -, the tendency should be towards resolution via technical procedures. “I tend to believe that, in case of divergence, the discussion goes towards practical harmonization rather than literal ‘mirroring’”, he ponders.
Safeguards and coffee
Another point of attention are trade defense mechanisms, such as safeguards that can be applied after a 5% increase in imports of sensitive products. While Galdi sees the trigger as a source of legal uncertainty, the Secretary of Commerce and International Relations, Luis Rua, defended in an interview with Broadcast Agro that it is an internal rule of the European bloc. Rua projects that Brazil will occupy most of the quotas due to historical performance criteria and highlights that the agreement has rebalancing mechanisms.
In the coffee segment, the zeroing of tariffs for soluble and roasted products in four years creates incentives for the export of items with greater added value. Galdi points out that the main gain will be the increase in shipping of the finished product from Brazil. However, both she and Gilio rule out a massive migration of European industries to the country. “It is a market that involves aspects of differentiation, based on the blends that define flavor and quality, which limits the transfer of industrial plants”, explains Gilio.
