Treaty eliminates tariffs on thousands of products, but anti-deforestation regulations could limit exports
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The entry into force of the established one of the largest free trade zones in the world. Negotiated for around 25 years, it represents one between the 2 regions and its adoption was a victory for cooperation between the blocks by reducing tariffs and expanding trade flows between the 2 markets.
However, this movement occurs in parallel with a structural transformation in European law: the expansion of environmental standards with extraterritorial reach, which begin to condition access to the European market. This tension between trade openness and environmental regulation is central to understanding the real effects of the agreement.
The EU–Mercosur agreement follows a classic logic of international trade: its main objective is to facilitate the access of Mercosur products to the European market while expanding opportunities for European exporters. It is a legal instrument guided by the reduction of tariff barriers and the integration or economic rapprochement between the two blocs.
The European Commission estimates that the treaty is expected to generate significant economic impacts by 2040. The EU’s GDP is expected to increase by more than 77 billion euros. Exports are expected to expand to reach up to 50 billion euros in monetary value. Growth in exports to Mercosur is estimated at around 39%.
The EU hopes to generate up to 600,000 jobs on its territory. The treaty provides for the progressive elimination of tariffs on automobiles, which can reach 35%. Tariffs on machinery, chemical and pharmaceutical products will also be phased out. The benefits are expected to exceed 4 billion euros per year for European companies.
Mercosur is seen as a strategic supplier of critical raw materials for green and digital transitions, such as niobium. This liberalization also extends to public procurement: European companies are allowed to participate in government tenders in Mercosur countries, including relevant markets such as Brazil.
In the agricultural sector, the agreement reduces tariffs on European products such as wine, olive oil and chocolate, while protecting geographical indications and limiting sensitive imports through quotas.
In the Brazilian case alone, an increase of around 13% in exports is estimated by 2038. Mercosur countries are already among the main agricultural suppliers to the European Union, a position that tends to be reinforced with the agreement.
Products such as meat, soy and coffee —central to the Brazilian export agenda— may benefit from the tariff reduction. It is estimated that tariffs on thousands of Brazilian products, around 5,000 tariff lines, will be progressively eliminated.
However, this model assumes that the main obstacle to trade is tariffs. Access to the European Union market today increasingly depends on compliance with regulatory requirements, especially environmental ones.
Environmental regulations establish strict criteria
The European Union has developed regulatory instruments that condition access to its market to compliance with strict environmental standards. The (Anti-Deforestation Regulation), established in 2023, requires that products placed on the European market are not associated with deforestation.
The standard covers 7 products and some of their derivatives. They are:
- café;
- beef;
- military;
- cocoa;
- madeira;
- palm oil;
- rubber.
The obligations imposed by the regulation have extraterritorial scope and also apply to operators located outside the European Union whenever they wish to export to the European market.
In practice, production chains in Mercosur countries are now regulated by European standards such as EUDR. Therefore, the production of soy, beef, coffee, cocoa, wood and some of their derivatives must meet criteria defined by the European Union.
Access to the European market becomes conditional on adaptation to this regulatory framework and imposes a due diligence system on private operators based on the collection of georeferenced information, risk assessment and the adoption of mitigation measures.
European or foreign operators operating in the EU market must exercise this duty of diligence in their production chains. In other words, they must adopt all measures to ensure that there are no traces of deforestation in their production chains.
Products that do not meet these criteria may be excluded from the market. Thus, even though the Mercosur-EU agreement facilitates market access by reducing tariffs, there are regulatory and environmental compliance standards that can hinder or even prohibit exports of the same products.
Lack of alignment
The EU–Mercosur agreement mentions the importance of sustainability and the environmental agenda. It also refers to the duty of diligence of private operators in their production chains.
However, the reference is still limited. The treaty refers solely to . Instrument designed for mineral chains in conflict contexts.
The agreement does not directly address agricultural chains linked to deforestation, nor does it incorporate references to instruments such as the EUDR. Therefore, the regulation can produce the opposite effect of opening up the market, restricting access to them.
The EUDR may, to a certain extent — and within a scope that still needs to be better assessed — neutralize part of the agreement’s commercial advantages.
The European Union negotiated a trade liberalization agreement without explicitly integrating its extraterritorial environmental standards. With this, it ensures better access conditions for its own products in the Mercosur market and, at the same time, preserves regulatory instruments that allow it to condition —or even limit— the entry of certain Mercosur products into its market.
There is therefore a misalignment between the content of the agreement and the European regulatory reality. This mismatch suggests that Mercosur countries have not fully incorporated the impact of European extraterritorial norms into their negotiation strategy.
A paradox thus arises: tariff liberalization coexists with the intensification of environmental regulatory barriers. The possible result is selectivity. Only producers capable of meeting complex requirements are able to access the European market. Others will be excluded. This scenario calls into question the intrinsic effectiveness of the trade opening promised by the agreement.
is a law professor,
This text was originally published by The Conversation, on May 4, 2026. The content is free for republication, the source is cited, and was adapted to the Poder360 standard.
