The deal with South American partners is being applied on a provisional basis, even though full ratification has not been completed. That opens fresh opportunities for European companies, but it also keeps political and economic tensions simmering inside the EU.
From the start of May, goods from Mercosur can enter the European Union under preferential terms. Tariff cuts are spread over time, and sensitive products are capped with quotas—measures designed to reduce the risk of a sudden surge of low-cost food imports.
A safeguard clause is also built in for market disruption. If prices fall by at least five per cent, tariffs can be reinstated or imports temporarily limited.
European Commission: benefits from day one
From Brussels’ perspective, the agreement delivers right away. EU exporters can start using lower duties and improved access to Mercosur markets from the moment the rules apply.
The automotive sector is one of the clearest examples. Import duties in Mercosur on electric and hybrid cars drop from 35 per cent to 25 per cent, while tariffs on combustion-engine cars fall from 35 per cent to 17.5 per cent. For automotive parts, liberalisation is set to cover 90 per cent of exports over 10 years.
Similar schedules apply in other industries:
- machinery and equipment — pre-agreement tariffs of 14–20 per cent will be phased out for 93 per cent of exports
- pharmaceuticals — duties of up to 14 per cent are to be reduced to zero over 10 years
- textiles — tariffs of up to 35 per cent are to be eliminated within eight years
Services also get a broader opening
The agreement is not limited to goods. It also expands access to services markets, including financial services, telecommunications and postal services.
The framework includes measures that allow for:
- providing services on the same footing as local operators
- temporary transfers of staff for business purposes
- clearer regulatory rules, including in telecoms and access to radio spectrum
On top of that, EU companies gain access to public tenders, including in Argentina, Brazil and Uruguay.
Poland plans a case at the CJEU
Poland’s government has opposed the agreement from the outset, disputing both its content and the way it has been handled—especially the decision to apply parts of the agreement before full ratification.
“We are preparing a complaint to the CJEU because we do not accept how the EU–Mercosur agreement has been processed and the fact that it is being applied in part from May 1. We want the Court to examine the decisions that have been taken. From the beginning, we have been showing what consequences this agreement may have for Polish agriculture and exports. At the same time, we are opening new markets—in Japan, Korea and Morocco—to strengthen the position of Polish food,” said Stefan Krajewski, minister of agriculture and rural development.
The government notes that Poland sought to build a blocking minority with, among others, France, Ireland, Austria, and Hungary, but did not secure sufficient support.
Proceedings at the CJEU can take years, and filing a complaint does not suspend the agreement’s application. In parallel, the European Parliament has also requested an assessment of whether the deal is compatible with the EU treaties.
Industry stands to gain, but agriculture remains uneasy
The benefits are not evenly distributed. The biggest upside is concentrated in industry—especially automotive, machinery manufacturing and metals—sectors that gain access to markets that were previously heavily protected by tariffs.
Agriculture, meanwhile, remains the most sensitive area. That has been one of the main reasons some member states, including Poland, have resisted the deal, pointing to weaker price competitiveness for European producers against imports from outside the continent.
France urges continued political pressure
Poland is not alone in its criticism. In France, opposition is particularly strong in farming circles. “Let’s keep fighting and keep making demands,” says Jérémy Decerle, an MEP and cattle farmer who sits on the European Parliament’s Committee on Agriculture and Rural Development.
He argues that provisional application is a result of the European Parliament not having completed the ratification procedure. In his view, the agreement’s final outcome is still uncertain, and a rejection by Parliament could cause it to collapse.
Decerle also stresses the long history behind the file, and says the CJEU’s opinion—along with a later vote by MEPs—will be decisive.
Germany: business expects room for growth
German business groups are taking a different view. According to the German Chamber of Industry and Commerce (DIHK), trade with South America is set to become more important thanks to the Mercosur agreement.
In a DIHK survey, 44 percent of internationally active companies expect noticeable effects in the medium term. The organisation reads this as a sign that commercial ties with South America are gaining weight.
New compliance steps for exporters
The agreement’s entry into application also comes with concrete requirements for companies. Exporters need to, among other things:
- obtain an EORI number
- confirm rules of origin for their goods
- prepare commercial and customs documentation
- check market requirements and restrictions
Access to export-support tools is intended to help businesses navigate the new trading conditions.
Trade moves faster, the dispute continues
The start of the EU–Mercosur agreement’s application signals where global trade is heading. On one hand, companies gain new routes to market and additional export opportunities; on the other, tensions between sectors and member states remain. The coming months—and decisions taken by EU institutions—will show whether this provisional setup becomes a lasting foundation for cooperation, or just another chapter in a long-running argument over the direction of Europe’s trade policy.
