Beef
The deal negotiated for the EU retains the 2019 inward TRQ of 99,000 tonnes (carcass weight equivalent) with a 7.5% duty but extends its application to all four Mercosur countries instead of just Brazil and Argentina. The quota, divided into 55% fresh and 45% frozen meat, represents 1.6% of EU beef production. In 2023, EU imports from Mercosur totalled 141,537 tonnes, exceeding the quota by 42,537 tonnes. There has been a 4.14% average annual growth rate in EU beef imports from Mercosur since 2021, despite disruptions from Brexit and COVID-19. The Hilton Agreement, which permits 58,100 tonnes of premium beef imports into the EU from eight countries, including the four Mercosur nations, currently applies a 20% preferential tariff. The 2024 deal proposes removing this tariff for Mercosur exports while maintaining it for other countries, indicating likely revisions to future quotas. Under the 2022–2023 Hilton quota, Argentina, Brazil, Uruguay, and Paraguay exported 29,500, 10,000, 5,600, and 1,000 tonnes respectively. Although Brexit and South American competition were thought to threat Irish beefs market share in the UK, we have not seen this, favourable post-Brexit terms ensured Irish beef accounted for 70.4% of UK imports in 2023, aided by a strong pound and high price differential.
Figure 1: Imports of fresh and frozen beef into the EU
Source: Trade Data Monitor
The UK, as a net importer of beef, primarily relies on domestic and Irish beef for its supply. However, it exports higher-value cuts to the EU, which remains a key market post-Brexit. The influx of competitively priced South American beef could depress prices in the EU, eroding demand for UK exports. Additionally, UK beef already faces regulatory checks and tariffs when entering the EU, and the preferential terms granted to Mercosur countries under the EU-Mercosur trade deal could further disadvantage UK producers.
Trends in EU beef imports show a decline in beef from the UK and an increase from the four Mercosur countries. If the trade deal is fully ratified, this trend is likely to accelerate, as preferential terms for the South American bloc come into effect. Furthermore, the UK may also see an increase in beef from the EU, as more price-competitive beef from Mercosur nations displaces the EU’s domestic supply. However, any displaced beef from the EU entering the UK is expected to have a negligible impact on UKs domestic beef prices, given that the TRQ for Mercosur countries only represents 1.6% of EU production.
Pork
Under the potential trade deal, Mercosur countries will gain access to a TRQ of 25,000 tonnes of pigmeat into the EU, with an initial allocation of 4,167 tonnes in the first year, rising to 25,000 tonnes over five years. The in-quota tariff will be €83/tonne, significantly lower than the €536/tonne charged under the MFN tariff for fresh carcasses. Paraguay will also gain an additional 1,500 tonnes of access in 2024. Currently, Mercosur countries export negligible amounts of pork to the EU, but reduced tariffs could shift this dynamic, especially given the lower producer prices of Paraguay.
Mercosur nations are also major soy exporters, with Brazil alone accounting for 56.9% of global exports. While these countries impose export taxes on soy, a signed deal could reduce or remove these taxes, lowering feed costs for EU pig producers. Feed accounts for a significant portion of production costs and soya as a high protein crop is a key ingredient. Reduced soy prices would enhance the cost competitiveness of EU pigmeat. In 2023, EU pig production costs stood at £1.89/kg, compared to £1.96/kg in the UK.
Lower production costs in the EU, including cheaper feed, would likely make EU pork more competitive globally and within the UK market especially as there are no tariffs on pork entering the UK from the EU. The UK, which exported 41,730 tonnes of pork to the EU in 2024, may face increased competition from both EU pork, as EU producers benefit from cost advantages.
Poultry
The EU-Mercosur trade agreement would allow 180,000 tonnes of duty-free poultry into the EU, representing 1.4% of EU consumption. Currently, Mercosur poultry exports to the EU average 66,256 tonnes annually with 97% coming from Brazil. The UK exports average 224,527 tonnes. Brazil, the world’s largest poultry exporter, has significantly lower production costs (£1,018/tonne) than the UK (£1,331/tonne). Tariff removal will make Brazilian poultry highly competitive, potentially eroding UK market share in the EU. Additionally, reduced soy export taxes under the deal could lower EU poultry production costs further as imported soya places downward pressure on feed grains.  This may displace some of the UKs domestic supply as cheaper poultry enters the country from the EU but is unlikely to cause disruption due to the rising demand and consumption for chicken meat in the UK.
Dairy
Mercosur, as a trade bloc, is largely self-sufficient in dairy production, with Uruguay at 281% self-sufficiency, Argentina at 132%, Paraguay at 103%, and Brazil at 98%. The proposed trade deal focuses on processed dairy products, including cheese, infant formula, and milk powders.
Currently, dairy imports into Mercosur are subject to tariffs of 28% (18% for infant formula). The deal proposes TRQs of; 30,000 tonnes for cheese, 10,000 tonnes for milk powder, and 5,000 tonnes for infant formula, with tariffs gradually reduced to zero. These TRQs would also apply reciprocally to EU imports from Mercosur, reflecting contrasting peak dairy production periods in the northern and southern hemispheres.
EU cheese exports to Mercosur have declined significantly, dropping from approximately 4,000 tonnes annually before 2020 to just over 2,500 tonnes in 2023. The TRQs are expected to rejuvenate the market for European cheeses, benefiting key exporters like France, Netherlands Italy, and Spain.
Figure 2: EU cheese exports to Mercosur
