‘Brazilian Jaguars’ seen as key winners of EU–Mercosur deal

Despite the European Union accounting for a smaller share of their total exports, a group of Brazilian states known as the “Brazilian jaguars” are expected to benefit disproportionately from the EU–Mercosur trade agreement. That is the conclusion of a report by Futura Inteligência, a research arm of Apex Partners.

The term “Brazilian jaguars” echoes the “Asian Tigers,” the economies that led Asia’s growth in the second half of the 20th century. In Brazil, the label refers to states that share characteristics such as consistently above-average economic growth, higher Human Development Index (HDI) scores, government efficiency and institutional stability.

Apex classifies Mato Grosso, Mato Grosso do Sul, Espírito Santo, Paraná, Santa Catarina and Goiás as “Brazilian jaguars,” with Minas Gerais and Rio Grande do Sul included to a lesser extent.

According to the report, these states sent 12.9% of their exports to the European Union in 2025, below the 14.3% share recorded for Brazil as a whole.

Even so, the expected economic impact of the agreement on the jaguar states is likely to be more pronounced, the report says, because their export baskets are more heavily weighted toward commodities and agribusiness products — segments set to benefit most from the new trade rules.

Agribusiness accounts for 67.4% of the value of jaguar-state exports to the EU, compared with 23.8% in the rest of the country, according to Apex.

The three main products exported by the jaguar states to the EU that are currently subject to tariffs are unroasted coffee ($6.2 billion), soybean meal and other animal feed ($3.2 billion), and tobacco ($1.1 billion). These face average export tariffs of 4.2%, 1.6% and 5.6%, respectively. Under the agreement, most coffee shipments are expected to see immediate tariff elimination, while soybean meal, other animal feed and tobacco will be phased out gradually, Apex said.

A separate study by FGV Ibre also points to Brazil’s Center-West as the region with the greatest potential gains from the agreement, driven by meat and soybean production, while identifying clear net benefits for the South, which is strong in meat, tobacco and processed foods. Both regions include jaguar states.

The FGV Ibre study also highlights potential gains for Brazil’s Northeast, particularly in tropical fruits, honey and sugar.

“In addition, the Northeast imports little from the EU, which tends to stimulate exports more than create threats via imports, since the region lacks a significant industrial base that could be heavily affected by foreign competition,” said Flávio Ataliba, an associate researcher and coordinator of FGV Ibre’s Center for Northeast Development Studies.

Unlike the North — which has natural products with export potential to the EU, especially those linked to the Amazon rainforest, but is likely to face challenges from non-tariff barriers such as sanitary and phytosanitary requirements — the Center-West already meets many of these criteria, Ataliba noted. There, he said, the main challenge will be aligning production with environmental and traceability requirements.

In the Northeast, however, structural constraints are more pronounced, particularly when it comes to transporting goods to Europe. “This involves adequate rail and road infrastructure, as well as greater logistical efficiency at regional ports to make exports viable,” Ataliba said.

Part of the advantage enjoyed by jaguar states such as Espírito Santo, Santa Catarina and Paraná lies precisely in the fact that they already have logistics infrastructure in place to handle a potential increase in exports, Apex said.

Although many cities in the jaguar states already post relatively high HDI levels, Orlando Caliman, economic director at Apex Partners, sees scope for broader social gains from the agreement, not just benefits for large landowners.

“In Espírito Santo, the average farm size is 33 hectares; in Santa Catarina, it’s 32 hectares. These are small farms — coffee, papaya and ginger in Espírito Santo; fruit and poultry in Santa Catarina. Many already produce under certification schemes. I think small producers have a chance to anticipate some of the potential gains down the road,” Caliman said.

For the Northeast, however, Ataliba described a more complex outlook. “Historically, the region lags in human capital and skilled labor, which can hinder international integration. In addition, because economic activity in the Northeast is more fragmented, it is harder to regulate all these exporters,” he said.

In 2025, the EU accounted for $49.8 billion of Brazil’s exports (14.3%) and $50.3 billion of its imports (17.9%). Apex expects growth of around 3% in both exports and imports through 2040.

A study by the Ipea estimates that the agreement could lift Brazil’s GDP by 0.46% by 2040. If realized, Brazil would post the largest percentage GDP gain among participants, ahead of the EU (0.1%) and the rest of Mercosur excluding Brazil (0.2%).

Ipea’s estimate was made before safeguard mechanisms were factored in, which could reduce the scale of the gains, Apex noted. “Paraná and Santa Catarina, for example, may face more challenges because they are the largest exporters among the jaguar states of products covered by safeguards. Issues could arise as Brazil approaches quota ceilings, which are set by country,” Caliman said. Both states count meat — which is subject to protective quotas — among their main exports to the EU.

Bradesco said the agreement should be positive for margins and value in Brazilian protein exports, but with limited impact on volumes. “In 2025, Brazil exported 85,000 tonnes to the EU. Even under current tariff conditions, the country alone would already account for 85% of the 99,000-tonne quota allocated to all Mercosur countries, which would be phased in over five years,” the report said.

On the other hand, Caliman noted that Paraná and Santa Catarina also export machinery and equipment and could benefit from access to European technologies, whose transfer is foreseen in the agreement. “They could gain competitiveness not only in the European market, but beyond it as well.”

Caliman acknowledged that the agreement, formally signed in January after more than two decades of negotiations, will take time to have a tangible economic impact in Brazil and in the jaguar states in particular. Recently, the European Parliament approved a request for a legal opinion from the EU Court of Justice to assess whether the agreement complies with bloc treaties.

“I think it will move quickly through the Brazilian Congress and Mercosur, but in Europe there is still resistance, led mainly by France and Poland. I don’t believe we’ll see results in less than a year and a half,” he said.

The agreement text has already been submitted by President Luiz Inácio Lula da Silva to Congress, and Chamber of Deputies Speaker Hugo Motta said the intention is to bring it to a plenary vote in the week following Carnival.

P&S Consultoria said it believes the agreement will advance in Europe, given the region’s economic and geopolitical challenges, but warned that the risk of delays remains high. On the Brazilian side, swift congressional approval would send a positive signal aligned with the need to expand the country’s growth potential, as Brazil’s low level of economic integration with the world remains a key constraint on productivity, the consultancy said.

By Anaïs Fernandes and Grace Vasconcelos, Valor Econômico

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