After more than two decades of negotiations, the European Union is moving forward with the EU–Mercosur Trade Agreement, a deal between the EU and South American countries that affects tariffs and market access for goods, with Greece among the nations likely to be impacted.
The agreement was approved by a special majority, requiring the support of at least fifteen EU countries representing 65 percent of the bloc’s population. The deal has sparked intense debate across Europe, particularly among farmers, as Greece weighs the potential export opportunities against the risk that increased imports could hurt sensitive agricultural products.
What is Mercosur?
Mercosur, or the Southern Common Market, is a South American trade bloc made up of Argentina, Brazil, Paraguay, and Uruguay.
The EU–Mercosur Agreement aims to reduce tariffs and expand trade, while including commitments on sustainable development, labor standards, and environmental protection, but critics warn these commitments are weak, lack binding enforcement, and may not prevent environmental or social harm. Once fully implemented, the deal would reduce tariffs between the EU and Mercosur countries, affecting trade for more than 700 million consumers.
Mercosur Producers Allowed to Keep “Feta” Name
The agreement allows producers in Argentina, Brazil, and Uruguay who already use the name “feta” to continue doing so for up to seven years, as long as the product’s origin is clearly labeled, a provision that Greek producers warn could confuse consumers and weaken the product’s reputation.
Although “feta” is legally protected as a Greek PDO (Protected Designation of Origin) in the EU and in many other countries that recognize EU geographical indications, the EU–Mercosur Agreement includes a special transitional clause allowing producers in Argentina, Brazil, and Uruguay who were already using the name before the deal to continue doing so for up to seven years, provided the product clearly indicates its origin. This “prior-use” exception is a negotiated compromise to avoid disrupting existing Mercosur businesses.
At the same time, Greece secured protective measures, including higher duties on citrus imports to help maintain domestic prices and competitiveness. The deal also legally shields 344 EU agricultural products from imitation in Mercosur markets, including 21 Greek items such as feta, Kalamata olives, regional olive oils, saffron, wines, tsipouro, and retsina.
While supporters highlight the potential benefits of name protection for exports and pricing, Greek farmers’ unions and critics argue that the long transition periods, limited enforcement, and remaining tariff openings could still put small producers under pressure, and many call for stronger safeguards and transitional support.
Consumer impact remains contested. Supporters of the agreement point to the possibility of lower prices and greater product variety, but critics counter that any short-term price relief could come at the cost of domestic production, rural employment, and long-term food security, especially if Greek farmers are forced out of the market.
Farmers strongly oppose
Despite the safeguards, farmer groups across Europe remain wary that cheaper imports could undercut incomes, particularly in the livestock sector. Greek and other European producers are concerned about potential unfair competition if environmental and labor standards are not applied consistently. They argue that Greek agriculture, which is dominated by small and medium-sized farms with higher production costs, would struggle to compete with large-scale producers in South America.
Different production standards
There are also more general worries over food safety, although EU officials emphasize that all imports must comply with European regulations. Critics in Europe and Greece raise concerns about differences in production standards, particularly regarding the use of pesticides, antibiotics, and environmental rules in Mercosur countries. Many farmer unions argue that imported products produced under looser regulations could undermine EU farmers while exposing consumers to goods that do not meet the same safety and sustainability benchmarks applied within the bloc.
Why does the European Commission support the Mercosur deal?
The European Commission argues that the agreement strengthens Europe’s strategic autonomy amid rising global trade tensions. Supporters, including Germany and Spain, contend that the deal could boost an EU economy facing pressure from Chinese competition and US tariffs.
Energy and technology transitions also factor into the Commission’s support. South America holds critical raw materials—such as lithium, copper, iron, and cobalt—essential for Europe’s green and digital transformation.
To address resistance, Commission President Ursula von der Leyen proposed allocating an additional €45 billion ($52.57 billion) to the Common Agricultural Policy from the 2028–2034 EU budget.
Measures adopted by the European Parliament
In response to farmer concerns, the European Parliament approved a package of safeguards aimed at protecting EU agriculture from sudden market disruptions.
The agreement provides strong legal protection for products with geographical indications. Greek wines such as Santorini, Naoussa, and Nemea, along with distillates like ouzo and tsipouro, now receive formal protection, ending their treatment as generic names.
Additionally, fourteen sensitive agri-food products—including citrus fruits, olive oil, cheeses, kiwis, peaches, eggs, meat, rice, and honey—will be subject to special safeguards. If imports rise by more than five percent annually or average import prices fall by over five percent, the EU can reintroduce tariffs or suspend imports.
What the EU-Mercosur Agreement changes for EU trade
Under the agreement, Mercosur countries will gradually remove tariffs on 91 percent of EU exports over fifteen years. These include automobiles, machinery, wines, cheeses, and spirits—sectors considered strategically important for Europe’s industrial base.
In return, the EU will phase out tariffs on 92 percent of Mercosur exports within up to ten years. Preferential quotas will apply to sensitive agricultural products, including beef, poultry, sugar, rice, ethanol, honey, and corn. Specifically, the deal allows an additional 99,000 metric tons of beef imports under preferential terms, equivalent to roughly 1.6 percent of EU beef consumption. Mercosur will also grant the EU a duty-free quota for 30,000 tons of cheese.
Major implications of the EU-Mercosur Agreement
In 2024, the EU accounted for nearly 17 percent of Mercosur’s total goods trade, making it the bloc’s second-largest trading partner. Total EU–Mercosur trade exceeded €111 billion ($129 billion), with more than 80 percent involving Brazil. Between 2014 and 2024, bilateral goods trade grew by over 36 percent, highlighting the economic significance of the EU–Mercosur Agreement.
For Greece, the deal presents both opportunities and risks. Export-driven sectors could benefit, while agricultural producers remain heavily dependent on the effective enforcement of safeguards. As ratification moves forward, Greek farmers and policymakers will be watching developments closely.
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