By a majority, the EU approved the agreement with Mercosur

After 26 years, on Friday January 9, 2026, the European Union approved the trade agreement with Mercosur. European Commission President Ursula von der Leyen is expected to travel to Asunción to sign the deal.

Although France’s vote against the agreement failed to stop its approval, French Members of the European Parliament have pledged to block its ratification in the European Parliament in order to protect the agricultural sector. France, Poland, Austria, Hungary, and Ireland voted against the agreement, while Belgium abstained, according to diplomats familiar with the matter who spoke to Euronews. The decision represents a major setback to French efforts to rally a blocking minority.

In any case, this is not the final step for the agreement to enter into force, as it still requires approval by the European Parliament. That process is expected to take several weeks, during which countries opposing the agreement will likely attempt once again to block it.

Regarding beef, the agreement provides improved access for Mercosur to the European market through two mechanisms: the elimination of the tariff on the Hilton quota and the creation of a new quota.

The current tariff applied to the Hilton quota is 20%. Eliminating this duty would have a heterogeneous impact among the four Mercosur countries, as each holds quotas of different sizes, both in absolute and relative terms.

For the bloc, eliminating the tariff would imply an estimated tariff saving of around US$ 100 million, according to an analysis previously released by INAC. Given the size of its quota, Argentina is estimated to capture about two-thirds of that benefit. In all cases, the tariff savings would benefit both exporters and importers.

The agreed text between the EU and Mercosur also provides for the creation of a new beef quota of 99,000 tons carcass weight, with an in-quota tariff of 7.5%. This quota may be used for both grassfed and grainfed cattle, with 55% required to be chilled beef and the remaining 45% frozen.

The fact that the quota cannot be used entirely for chilled beef reduces the economic value of the concession. INAC estimates that this quota has an economic value for Mercosur countries of more than US$ 600 million.

Administration of the quota must be allocated by Mercosur, an issue the bloc has yet to resolve, as members first wanted the agreement to be signed before addressing this discussion. At one point, it was suggested that Brazil would receive 37.5% of the 99,000-ton quota, Uruguay and Argentina 25% each, and Paraguay 12.5%. However, Paraguay does not agree with this allocation mechanism and has for several years demanded a more equitable distribution of this preferential tariff quota.

The entry into force of the 99,000-ton quota to the European Union will be phased in over a five-year period, with one-fifth becoming available each year (19.8 tons carcass weight per year).