Mercosur-EU agreement eliminates tariffs on exports

The Mercosur-European Union trade agreement enters into force this Friday (May 1), with a direct impact on Brazilian exports. According to estimates from the National Confederation of Industry, more than 80% of the products Brazil sells to the European bloc will have their import tariffs eliminated in the initial phase.

In practice, the removal of tariffs lowers the cost of entry for Brazilian products into Europe, increasing their competitiveness against countries that do not have similar agreements with the bloc.

The treaty creates one of the world’s largest free-trade areas, linking a market of more than 700 million consumers. According to the confederation, more than 5,000 Brazilian products will receive immediate tariff-free access, including industrial and agricultural goods.

In the first quarter of 2026, Brazil exported about 111,456 TEUs of goods to the European Union’s 27 member states. The chart below shows the share of the top 10 exported products, according to Datamar data:

Top Exports to the European Union | Jan-Mar 2026 | TEUs

Source: DataLiner (click here to request a demo)

Direct impact on exports

At present, several Brazilian products face tariffs when entering the European market, which raises their final price. Under the agreement, those barriers will begin to be dismantled.

Of the 2,932 products that will have tariffs eliminated at the outset:

• 93% (2,714) are industrial goods
• The remainder includes food products and raw materials

The change is expected to benefit Brazilian industry in particular, giving it more competitive access to one of the world’s most demanding markets.

Sectors set to benefit the most

Among the segments expected to see the strongest positive impact are:

• Machinery and equipment (21.8%)
• Food products (12.5%)
• Metallurgy (9.1%)
• Electrical machinery and materials (8.9%)
• Chemicals (8.1%)

In the machinery and equipment segment, nearly 96% of Brazilian exports to Europe will enter tariff-free. That includes compressors, industrial pumps and mechanical parts.

In the food sector, broader market access could create room for a larger presence of Brazilian products in Europe.

Strategic weight of the agreement

The agreement significantly expands Brazil’s commercial reach. Today, countries with which Brazil maintains trade agreements account for about 9% of global imports. With the addition of the European Union, that figure could exceed 37%.

In addition, the treaty establishes clearer rules on trade, government procurement and technical standards, increasing predictability for exporting companies.

Gradual implementation

Despite the immediate impact, some products will see tariff cuts phased in over time:

• Up to 10 years in the European Union
• Up to 15 years in Mercosur
• In some specific cases, the transition may extend to 30 years

This transition is intended to protect sectors considered sensitive in both blocs.

Next steps

The entry into force marks the beginning of the practical implementation of the agreement. The Brazilian government is still expected to regulate issues such as the allocation of export quotas within Mercosur.

A committee bringing together business groups from both blocs is also expected to be created to monitor implementation of the treaty and guide companies on how to make use of the new trade opportunities.

Source: Vitória News

Sharing is caring!