EU-Mercosur: Tariff preferences, monitoring mechanism and safeguard clauses for the food sector

Trade policy decision with implications for sensitive agricultural products

The Council of the European Union has approved the signing of the EU–Mercosur Agreement. The arrangements are intended to establish the world’s largest free trade area, opening substantial market opportunities while at the same time creating exposure for the food sector. To mitigate these risks, the framework provides for a range of safeguard mechanisms designed to protect sensitive products.

In this article, you will learn:

• What the EMPA and the iTA regulate, and why the iTA applies on a provisional basis
• Which safeguard mechanisms are provided for sensitive products
• Which practical steps companies and supply chains should now consider

1. EU-Mercosur

On 9 January 2026, the Council of the European Union approved the signing of two agreements with the Mercosur countries (Argentina, Brazil, Paraguay and Uruguay): the EU–Mercosur Partnership Agreement (EMPA), providing a comprehensive framework for political dialogue, cooperation and trade, as well as the interim Trade Agreement (iTA), reflecting the trade and investment pillar of the EMPA.

The iTA will apply as a standalone agreement until the full EMPA enters into force, enabling the economic benefits of the negotiated trade commitments to take effect at an early stage. Unlike the EMPA – which requires the consent of the European Parliament and ratification by all EU Member States – the iTA falls within the EU’s exclusive competence and can therefore be implemented without national ratification.

The objective is to create the world’s largest free trade area, encompassing more than 700 million consumers.

Negotiations began in 1999 and were concluded on 6 December 2024.

2. Food safety rules remain unchanged – EU standards continue to apply

For companies operating in the food sector, one key point remains unchanged: the EU’s stringent requirements on food safety as well as animal and plant health continue to apply in full. Any product placed on the EU market must therefore continue to comply with these standards. In Austria, the requirements under the Food Safety and Consumer Protection Act (LMSVG), together with its implementing legislation, remain fully in force. In practice, this means that importers and operators placing products on the market must continue to maintain robust documentation, valid certificates and effective traceability systems.

3. Public debate: economic concerns in the agricultural sector

In the public discussion – particularly regarding agriculture – concerns about increased competitive pressure from lower-priced imports are at the forefront. These concerns are reflected in the political assessment of the agreements and are weighed against the trade policy objectives.

4. Planned EU measures to address market disruptions: Safeguards Regulation

To address the concerns raised, the Council and the European Parliament have reached preliminary political agreement on a dedicated Safeguards Regulation implementing the bilateral safeguard clause for agricultural products under both the EMPA and the iTA.

The Safeguards Regulation is intended to allow for the temporary suspension of preferential tariffs where imports cause, or threaten to cause, serious harm to EU producers. It also provides for accelerated procedures and simplified triggering mechanisms.

5. What is foreseen?

Sensitive product groups (including meat and dairy segments, selected sugar and starch products and other agricultural goods) will be subject to enhanced monitoring and an accelerated procedure.

Triggers for investigations: For sensitive products, an investigation may typically be initiated where a price undercutting of 5% is combined with either a 5% increase in preferential import volumes (based on a three-year average) or a 5% decrease in import prices. Investigations must be concluded within four months; in urgent cases, provisional measures may be imposed within 21 days.

Market monitoring: The Commission is required to continuously and proactively monitor imports of sensitive products, to report on its findings at least every six months, and to extend monitoring to additional products where necessary. By 1 March 2026, it must also issue technical guidance on market surveillance and take measures to prevent circumvention.

6. Transitional framework pending entry into force of the Safeguard Regulation

Until the Safeguards Regulation is formally adopted, the Council decision provides for specific transitional arrangements to ensure that the EU can respond swiftly to market disruptions caused by imports of agricultural products. Under the iTA, the Commission may apply bilateral safeguard measures and stricter monitoring obligations apply to goods subject to tariff-rate quotas. Member States may request the initiation of investigations and the Commission must keep the Council promptly and fully informed of any intended safeguard measures. These temporary arrangements are intended to ensure a high level of protection for farmers and the agri-food sector during the transitional phase.

7. Practical implications

Companies are advised to cautiously factor expected tariff preferences into their pricing, sourcing and distribution strategies, while simultaneously taking the planned safeguard instruments into account from an operational perspective. Contractual arrangements should provide for price and volume volatility, include mechanisms for short-term measures, and set out obligations on quality assurance, traceability and documentation throughout the supply chain. This approach can create attractive opportunities but requires careful compliance and risk management.

Supply chains should also anticipate potential downstream effects. Short-term safeguard measures – such as the temporary suspension of preferential tariffs for certain product groups – may affect assortment planning and promotional strategies. Procurement teams should therefore build flexibility into sourcing strategies, maintain fallback options and ensure close monitoring of sensitive product markets in order to respond swiftly to price or volume changes.