Implications for trade, tariffs and market access
Overview
The EU–Mercosur trade agreement is set to become one of the largest trade agreements globally, covering a combined market of more than 700 million people. Following years of negotiations, the European Commission has signaled its intention to move forward, with phased implementation expected once ratification is completed, potentially starting from 2025–2026.
For Brazil, as the largest economy within Mercosur, the agreement is expected to significantly impact trade flows, market access and international business operations.
Tariff reductions and market access
A central element of the agreement is the gradual elimination of tariffs on the majority of goods traded between the European Union and Mercosur countries.
Over time:
- Tariffs on up to 90% of goods are expected to be reduced
- Many product categories will move towards near-zero import duties
- Sensitive sectors will be liberalised over longer transition periods
For European exporters, this creates improved access to the Brazilian market, particularly in industrial goods, machinery, chemicals and services. Brazilian exporters, in turn, benefit from increased access to European markets, especially in agriculture and commodities.
Simplification of international transactions
Beyond tariffs, the agreement focuses on reducing non-tariff barriers and simplifying cross-border trade.
Key developments include:
- Streamlined customs procedures
- Greater regulatory alignment between the EU and Mercosur
- Increased transparency in import/export requirements
These measures are expected to reduce administrative complexity and improve the efficiency of international transactions, particularly for companies operating across both regions.
Strategic implications for businesses
The agreement strengthens Brazil’s position as a gateway to the broader Mercosur region. For international companies, it provides a more predictable framework for trade and investment.
Sectors likely to see increased activity include:
- Industrial manufacturing
- Logistics and distribution
- Agriculture and food production
- Energy and infrastructure
Companies already active in Brazil may benefit from improved cost structures, while new entrants may find market access more accessible.
Outlook
While final ratification is still required, the direction of travel is clear. The EU–Mercosur agreement represents a structural shift in trade relations between Europe and South America.
For businesses engaged in international trade, the agreement is expected to lower costs, simplify operations and create new opportunities across sectors in the coming years.