After 25 years of on-and-off negotiations, the EU–Mercosur trade agreement is no longer a distant prospect. The trade part is entering provisional application on 1 May 2026. To help farmers cut through the noise and understand what the deal actually contains, we sat down with Dr. Bettina Rudloff, Senior Associate at the German Institute for International and Security Affairs (Stiftung Wissenschaft und Politik, SWP) in Berlin. As an expert on EU trade and agricultural policy, she recently delivered a keynote lecture at an EAF digital talk dedicated to this topic. Below, she shares her analysis and a few surprises.
Dr. Rudloff, the EU–Mercosur agreement has been called one of the largest trade deals in history. Yet when you strip away the headlines, the projected GDP gains for the EU are actually quite modest – around 0.1 per cent growth by around 2030. How should farmers interpret a number like that?
That figure often surprises, and it's worth explaining why. The EU and Mercosur already trade substantially without an agreement, and the EU has already offered market access on its side So the room for additional liberalisation by any agreement is linked to certain single areas – and thus the modelled growth effect – is smaller than it might appear.
For Mercosur, the projected gain is higher, around 0.3 per cent, because the recent EU market in total matters more to them than theirs to us, and some tariffs are still higher than in the EU. But I would generally caution against drawing overly simple conclusions from such assessed summarizing effects. Many positive effects of such an agreement cannot be captured in the usually used trade models: the geopolitical signal the agreement sends of international cooperation, improved access to raw materials such as rare earths from Brazil, and the investment climate that greater legal certainty creates.
The ifo Institute in Munich, looking at this agreement alongside others – such as those with India, Australia, and Indonesia – calculated that even accounting for US tariffs, the combined package of several agreements together could generate around 21.6 billion euros per year for Germany alone, or nearly 260 euros per capita. That paints a rather different, and positive picture.
The most politically charged element in the EU has not been an arable product but beef.
Let's talk specifics: From the perspective of an arable farmer, what are the most relevant parts of the agreement?
The agreement runs to 23 chapters plus 45 annexes, so there is a lot to digest. From the agricultural perspective, I would focus on four areas: market access, safeguards, export restrictions, and sustainability.
On market access to the EU’s market: the agreement uses mainly Tariff Rate Quotas – TRQs –. Reduced tariffs apply only up to a defined quantity; beyond that, standard tariffs kick back in. These additional quantities will not apply all at once, but will be phased in gradually over several years through increasing volumes – market liberalization is not happening overnight. Furthermore, the most sensitive products are excluded entirely from any liberalization, for example lamb, sheep, certain dairy tariff lines and some sugar categories. It is not an across-the-board opening – you have to look at it tariff line by tariff line
The most politically charged element in the EU has not been an arable product but beef. A new TRQ of 99,000 tons is set at a tariff lower than the recent ones, i.e. 7.5 per cent. This quantity is split roughly half-half between fresh and frozen. On poultry 180,000 tons are newly now duty-free and on sugar around 190,000 tons, primarily regarding Brazilian cane sugar. But the Agreement provides access for EU exports to the Mercosur, as well; i.e. tariffs for wine and dairy products are reduced.
For a farmer operating on thin margins, even small increases in imports can sting. What protection mechanisms does the agreement provide?
This is actually one of the areas where the new agreement is genuinely innovative. For the first time in an EU Trade Agreement, bilateral safeguard mechanisms – meaning safeguards specifically targeting the trading relationship of a certain agreement – have been extended to TRQ products. This means that agricultural products can now benefit from this protection as well. Previously, the assumption was that a TRQ was itself already a type of safeguard, because the market is only being opened for a limited quantity, even over a long period of time. Now, the new safeguard adds a further layer on top of that.
Alongside this, the EU has adopted a parallel enforcement regulation that shortens the timeline for launching a safeguard investigation from twelve months to four. Additionally, it introduces a numerical trigger assuming a threat to the EU market: if prices and import volumes for a covered product each fall by 5 per cent or more, the EU can initiate safeguards and potentially re-impose tariffs across 23 listed products, including beef and poultry.
It is also worth noting that the new TRQs largely reallocate existing trade flows – a significant share already enters under existing WTO quotas. This results in lower net import increases than the headline quantities suggest. An assessment for the European Parliament, to which I contributed to, put the maximum increase in EU beef imports, after full implementation, at around 1.5 per cent of total EU consumption, and other assessments indicate a potential price drop on beef of less than 2 per cent.
About Dr. Bettina Rudloff
Dr. Bettina Rudloff is a Senior Associate at the German Institute for International and Security Affairs (Stiftung Wissenschaft und Politik, SWP) in Berlin, Germany's leading think tank for advising policymakers on international relations and security. Her research focuses on EU trade policy, agricultural policy, development economics, and international economic relations. She has advised the European Parliament and numerous policy institutions on EU’s trade agreements and their agricultural implications.
The agreement introduces something called a "rebalancing mechanism". The European Court of Justice has been asked to evaluate it. What is that about, and why does it matter?
The rebalancing mechanism should ensure the overall spirit of an agreement to provide benefits even without violating jointly adopted rules. On the one side, if one party introduces new domestic rules – an environmental regulation, for instance – that undermine or nullify the benefits the other party had expected, compensation may be awarded through the dispute settlement mechanism. This compensation may take the form of the suspension of trade concessions such as tariff reductions. Critics on the other – the EU – side see this as a threat to regulatory sovereignty, with the risk that Mercosur countries could challenge future EU legislation. The prevailing interpretation is that the mechanism applies only to future rules, not to legislation already in place or anticipated. The EU Deforestation Regulation and the Carbon Border Adjustment Mechanism are already decided, so they would therefore fall outside its scope in their current form. Worth noting, too: the mechanism is valid mutually, so on both sides!
The Court of Justice has been asked by the EP to rule on the legal compatibility of this mechanism with the EU's treaties. This, however, repeats an old WTO principle. Other issues to be evaluated are the competencies, whether this is an EU-only or "mixed" agreement, and the precautionary principle. That evaluation could delay final Parliamentary ratification by several months, but it does not affect the provisional application starting in May.
The core question is: can the EU legally prohibit imports of certain products on the grounds of production standards?
The question of "mirror clauses" – whether and how the EU can apply own standards of production regarding imports – comes up frequently among farmers. Where does that stand?
This is one of the most legally complex areas, and it is moving quickly in terms of debate and certain initiatives. The core question is: can the EU legally prohibit imports of certain products on the grounds of production standards? One debated case is the prohibition of imports of products linked to the use of pesticides that are banned in Europe. This covers competitiveness grounds and not food safety grounds – the latter is in any case governed by import standards. The food safety argument is relatively straightforward in trade law and is governed by the SPS Agreement. Accordingly, clear standards exist to be enforced at the border.
On the competitiveness argument, it is difficult to determine whether certain weaker standards constitute unfair competitiveness or simply reflect different production conditions in another country.
We have recently finalised a study for the European Parliament on this issue, debated under the term "mirror clause", which refers to mirroring European standards. Some political steps have been taken recently within the omnibus regulations, for example by signaling the intention to address the mirroring of pesticides banned in the EU. Argentina and Brazil permit some pesticides that are banned in the EU, so a respective new rule is directly relevant to Mercosur. I expect this to remain a live policy area for several years, potentially covering animal welfare as well. Research is required here to define and compare animal welfare standards, for example on husbandry practices. Here, the agreement foresees a new dialogue specifically on animal welfare.
About the European Arable Farmers (EAF)
Founded in 1991 in Frankfurt am Main, the European Arable Farmers club is a small network of entrepreneurial farmers from European countries. Coordinated by the DLG (German Agricultural Society), the EAF promotes cross-border knowledge transfer through expert talks, on-farm visits, and open discussion formats. Working language: English. For membership enquiries, visit www.arablefarmer.net.
We are living through a moment of intense global trade tension – US tariffs, WTO dysfunction, a general retreat from multilateralism. Does this make the EU–Mercosur deal more or less significant?
More significant. When a major trading partner becomes unpredictable or protectionist, the rational response is to diversify. Mercosur, India, Australia – these agreements send a signal that Europe remains open to rules-based trade. That matters politically as much as economically, the latter indicated by the mentioned study of the ifo-Institue.
That said, I want to be careful not to lose sight of the WTO. It faces serious difficulties, but it is not dead. Its core principles – most-favoured-nation treatment, which requires equal trade treatment for all members, reciprocity, and non-discrimination – were built after the Second World War on bitter lessons. Abandoning them casually through "deals" of the kind recently pushed by Trump could lead to less stable and more asymmetric rules, to the detriment of all. In general, a rise in bilateral agreements, though supporting diversification, may create what trade economists call a "spaghetti bowl" of overlapping and even contradictory regulations. Multilateral rules therefore remain the preferable approach, though they are increasingly difficult to achieve.
There may be a promising middle ground between multilateral and bilateral agreements, i.e. in larger regional agreements – the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, for instance. Here, a large group of countries may follow the same rules and commit to basic WTO principles.
First: do not panic based on headlines and certain figures. The effects on volumes and prices are modest, as indicated by all current assessments.
Final question: what is your practical advice for European arable farmers trying to make sense of all this?
First: do not panic based on headlines and certain figures. The effects on volumes and prices are modest, as indicated by all current assessments. Beef and poultry have the most direct exposure, but it remains marginal. For arable products, even some small positive effects may arise, and more so for processed goods and specialities.
Second: watch the product list for sustainability yet to be defined. This new market access for ecologically certified products or socially relevant products – i.e. for indigenous communities – still has to be defined and may in some categories be mutual, applying to the EU as well. Those applying to the Mercosur side only may include arable products, possibly not of large market size. However, one should be prepared for certain additional market access and potentially competing products.
Third: stay tuned to regulatory developments running in parallel to the agreement. The safeguard enforcement regulation, the mirror clause initiatives, the evolving EUDR and related certificates and controls: these are shaping how the agreement plays out in practice across certain supply chains, and may ultimately matter more to your bottom line than any single tariff line announced in the text. Networks like the EAF are exactly the right vehicle for that kind of informed, cross-border exchange – and engaging together with colleagues in Mercosur countries would make for an even better exchange.
Interview: Clara Albrecht, DLG e.V.
