Brazil exported $700 million in products set for immediate relief under EU-Mercosur tariff cuts

The provisional trade agreement between Mercosur and the European Union, due to take effect on May 1, opens room for a gradual expansion of agribusiness exports, with the first benefits concentrated in higher value-added agroindustrial goods such as soybean oil. According to calculations by Insper Agro Global, Brazil exported about $700 million worth of agricultural products to the European bloc that will receive immediate relief under the EU-Mercosur tariff cuts.

Brazilian agribusiness exports totaled $170 billion in 2025, of which about $25 billion went to the European Union. Bruno Capuzzi, a researcher at Insper Agro Global, estimates that $17 billion in products Brazil sold to Europe already enter tariff-free, as is the case with soybeans and green coffee. That leaves another $8 billion in agribusiness products that will benefit from the agreement, most of them through tariff reductions over four to 10 years. Of that total, about $700 million will be affected immediately by the EU-Mercosur tariff cuts, becoming duty-free as soon as the agreement begins.

In addition to soybean oil, products such as leather derivatives, vinegars, bone meal proteins and wines will also become tariff-free, Capuzzi said. Items such as soluble coffee, beef and chicken will see tariffs reduced gradually. The new rules will apply to all Mercosur countries, not only Brazil.

“We still do not know how demand will behave, but the potential increase in shipments could indeed translate into better margins for rural producers,” Capuzzi said.

Daniel Amaral, director of economics and regulatory affairs at the Brazilian Association of Vegetable Oil Industries, told Valor that soybean oil tariffs currently range from 3.2% to 9.6%, depending on the product’s use, industrial or food, and on its degree of processing, crude or refined. Soybean meal is already tariff-free.

“With the implementation of the agreement, tariffs on crude soybean oil will be eliminated, while duties on other types of oil will be reduced to 4%. This tariff relief represents a significant step forward for Brazilian product access to the European market,” he said.

The expectation is that the EU-Mercosur tariff cuts will also attract new investment across the soybean supply chain. Even so, Abiove estimates that the most significant gains will come over the longer term, rather than through any abrupt shift in export volumes this year.

The Brazilian Coffee Exporters Council, or Cecafé, said the agreement provides for annual tariff reductions on Brazilian soluble coffee, roasted coffee and roasted and ground coffee entering the European bloc until they reach zero within four years. That will allow Brazil to increase its competitiveness in the European Union and likely expand exports of those products, especially soluble coffee.

For soluble coffee, the agreement is particularly relevant because the EU is the second-largest buyer of the Brazilian product, behind only the United States, said Aguinaldo Lima, director of institutional relations at the Brazilian Soluble Coffee Industry Association. The tariff on soluble coffee shipments will fall from 7.20% in 2026 to zero in 2030.

At the same time, another factor supporting Brazilian coffee competitiveness, especially robusta, is the impact of the Middle East conflict on Vietnam, Brazil’s main competitor in the European market. “Routes for Vietnamese product bound for Europe may end up being altered by the war, which could favor Brazil,” Lima said.

Meat quotas

In the meat segment, once the agreement takes effect and the required quota licenses and certificates are in place, Mercosur will receive a tariff-free quota of 15,000 tonnes of bone-in chicken and 15,000 tonnes of boneless chicken, according to the Brazilian Animal Protein Association, or ABPA.

The group’s president, Ricardo Santin, said the duty-free quota will gradually increase over six years until it reaches 90,000 tonnes of bone-in chicken and 90,000 tonnes of boneless chicken. “We are still discussing among the countries how much of the quota Brazil will receive. Brazil tends to be the country that will benefit the most in volume,” Santin said. “The EU is a market with good pricing, and that helps company margins. What is still unclear is the size of the benefit.”

In the case of beef, the sector expects the agreement to lead to gradual and moderate growth of about 5% a year in Brazilian sales to Europe, according to Roberto Perosa, president of the Brazilian Beef Exporters Association, or Abiec.

“The Mercosur-European Union agreement is positive for Brazilian beef, mainly because it improves access conditions to a market that pays better and focuses on higher value-added cuts, such as hindquarter cuts already exported to countries like Italy, Spain, Germany and the Netherlands,” he said.

On the Hilton quota, Perosa said removing the 20% tariff should increase competitiveness and make it easier to fill that volume in full. “As for the new 99,000-tonne quota, it will be divided among Mercosur countries on a phased basis over five years. Even so, it is important to stress that this does not automatically mean an increase in exports, because part of that volume is already traded today and will simply move under more favorable tariff conditions,” he added.

Source: Globo Rural

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