What’s changing?
The agreement will gradually eliminate duties on more than 90 percent of EU exports, including on cars, pharmaceuticals, wine and spirits, and olive oil. Some so-called non-tariff barriers — such as on labeling — will be removed. Public procurement markets will open up, allowing EU companies to bid for government contracts.
The Commission estimates that EU exports to the Mercosur region will grow by 39 percent through 2040, to €50 billion. “The benefits are real and visible as of now,” von der Leyen said in a post on X. “Tariffs start falling. Companies are gaining access to new markets. Investors have the predictability they need.”
But gains will be slower to materialize on some products. “In most cases, the tariff reductions will be phased in over a period of 10 to 15 years. The economic effects will therefore become apparent primarily in the medium to long term,” said Oliver Richtberg, head of foreign trade at Germany’s VDMA engineering federation.
But not for French Champagne, which, along with other sparkling wines, is already duty-free, down from a previous 20 percent tariff.
At the same time, Mercosur beef exports to Europe will be subject to a lower, 7.5 percent tariff on the first 99,000 metric tons annually. Anything above that will still be charged 40 percent. The EU produces that amount of beef in five days.
“The first installment of the agriculture quotas will happen on both sides and hardly anyone will notice. Certainly, there will be no visible effect in the EU beef market,” said Rupert Schlegelmilch, a former Commission official who negotiated the agreement. Provisional application will be a fairly quiet process, he added.