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EU Parliament stalls Mercosur trade deal, delaying agriculture tariff cuts

The vote underscores ongoing concerns over the impact on EU farming sectors, especially beef, and deepens uncertainty around the agreement’s timeline.

The EU-Mercosur trade agreement has been suspended following a European Parliament vote to seek an opinion from the Court of Justice of the EU on its legal compatibility with EU treaties, delaying implementation for up to two years.

On 18 January, MEPs voted 334 to 324 in favour of referring the agreement to the EU’s top court. The Parliament cannot proceed with ratification until a ruling is delivered, which could take between 18 and 24 months, as reported by Politico.

Signed earlier this month after 25 years of negotiation, the deal between the EU and Mercosur (with full members Argentina, Bolivia, Brazil, Paraguay, Uruguay, and (currently suspended member) Venezuela) was expected to offer improvements in market access for European agri-food exporters.

Beef remains a flashpoint for EU producers

Agricultural market access has been a key sticking point throughout negotiations. The deal allows for 99,000 tonnes of beef from the Mercosur market to enter the EU annually at a reduced 7.5% tariff. Poultry imports will also be capped, with 180,000 tonnes admitted duty-free over five years.

These terms have sparked opposition from farming groups and governments in countries such as France and Ireland, who warn that imported products may not meet EU environmental or production standards.

To address these concerns, the agreement includes safeguard clauses that allow the EU to suspend tariff preferences if import volumes rise sharply or if prices fall below a certain threshold. The European Commission also set aside €6.3 billion in agricultural crisis funding to support farmers in the event of market disruption.

Amaury Bessard, managing director of communications marketing firm Edelman France and chair of Food & Beverage Edelman EMEA, described last week’s parliamentary vote as “revealing deep national sensitivities and growing mistrust around one of Europe’s most ambitious trade agreements”.

Writing on LinkedIn, he said beef had “concentrated economic concerns, regulatory questions and symbolic tensions”, adding that for many farmers, Mercosur had become a symbol of broader frustrations with uneven rules across the single market.

Tariff reductions delayed for high-value EU exports

The agreement is structured in two parts: an Interim Trade Agreement (ITA) covering tariff reductions and a broader Partnership Agreement including political and environmental cooperation. While the ITA does not require unanimous approval from all EU member states, it must be ratified by the European Parliament and Council before it can take effect.

Under the ITA, tariffs would be gradually eliminated on approximately 91% of EU exports to Mercosur over 15 years. EU agri-food products set to benefit include wine, olive oil, chocolate and cheese, which currently face tariffs of up to 35%. The deal also provides protections for geographical indications and would increase export quotas over time.

Analysis by multinational bank ING has projected modest overall gains, estimating a 0.1% rise in EU GDP by 2032. The benefits are also expected to be uneven, with countries such as Spain, Italy and Germany, whose exports include high-value processed food and machinery, likely to see greater gains.

For Mercosur countries, GDP is expected to increase by 0.3% over the same period.

Broader trade environment adds pressure

The stalling of the Mercosur agreement comes amid wider trade challenges for EU food and beverage exporters. Since April 2025, the US has imposed a 15% tariff on many EU goods, including food products. Although exemptions were introduced in November for selected items such as coffee, beef and fruit juice, most processed foods and packaging materials remain subject to duties.

Between January and October 2025, EU agri-food exports to the US declined by €830 million compared to the same period in 2024, with significant reductions in wine and spirits shipments.

In China, trade barriers have also tightened. In December 2025, Beijing finalised anti-dumping duties on EU pork, ranging from 4.9% to 19.8%, and launched an investigation into EU dairy exports, including milk and cream products. These developments have forced many manufacturers to re-evaluate pricing strategies and consider alternative markets.