The EU has taken a significant step towards a brand new cope with Mercosur that might open up contemporary alternatives for the dairy sector on each side of the Atlantic.
On January 9, 2026, the EU Council agreed to signal the settlement, clearing a significant hurdle to formally undertake a treaty 25 years within the making.
The vote was marred by farmer protests from throughout the meat, poultry and grain sectors this week, however the European Dairy Affiliation, the physique representing EU processors, has been among the many advocates of the commerce settlement.
Listed below are a number of the the reason why dairy exporters each side of the Atlantic may benefit underneath the brand new commerce relationship.
What does EU-Mercosur FTA means for dairy?
The settlement secures reciprocal tariff reductions for cheese, milk powder and toddler formulation.
The deal additionally protects 344 EU GI (geographical indication) merchandise to make sure producers profit from these key authenticity markers overseas.
Moreover, the treaty ensures that illness outbreaks in a single EU area don’t block dairy exports from unaffected zones and secures unified import guidelines throughout the bloc together with sooner, clearer audits and checks.
What are the brand new quota charges for EU dairy?
The EU-Mercosur settlement introduces new quotas and can part out the present tariffs for key dairy merchandise together with cheese (presently going through a 28% import tariff); milk powder (28% tariff), and toddler formulation (18% tariff).
Cheese – which accounts for almost a 3rd of EU dairy exports to Mercosur – has secured a quota that’s almost 10 occasions bigger than what’s presently being exported by the bloc.
This implies EU producers have a wholesome headroom for export development within the coming years.
EU duty-free quotas (rolled out over 10 years):
Cheese: 30,000 MT
Milk powder: 10,000 MT
Toddler formulation: 5,000 MT
Dairy exports to Mercosur amounted to round $120m between 2015-2019 in keeping with a USDA report.
The EU and the US compete in classes akin to lactose, milk, cream focus, toddler formulation and milk albumin.
What do Mercosur dairy producers achieve?
Mercosur dairy exporters safe improved market entry to the EU, with bigger quotas and tariff benefits.
The quotas will regularly improve whereas tariff charges will lower, to the utmost TRQs listed under.
Mercosur dairy TRQs (rolled out over 10 years):
Cheese: 30,000 MT
Milk powders: 10,000 MT
Toddler formulation: 5,000 MT
What are the implications for GI‑protected cheeses?
Many EU cheeses get pleasure from protected standing by means of EU high quality schemes akin to PGI and PDO. These indications are seen as a marker of belief and authenticity and allow producers to command value premiums. Simply throughout the EU, GI merchandise generate €75bn per yr in income.
The EU-Mercosur settlement enshrines authorized protections for GI cheeses, permitting producers to maximise worth and scale back unfair competitors.
Beneath are a number of the EU cheeses protected underneath the treaty – although Mercosur dairy producers hold the appropriate to proceed utilizing a number of properly‑identified cheese names, to keep away from shopper confusion in these markets.
1. Queso Manchego (Spain)
Uruguay has recognised prior customers who might proceed utilizing the time period solely underneath strict circumstances.
2. Parmigiano Reggiano (Italy)
Prior customers allowed to maintain utilizing ‘Parmesão’ (Brazil), ‘Parmesano’ (Argentina, Paraguay, Uruguay), and ‘Reggianito’ underneath restrictions.
3. Grana Padano (Italy)
Prior Brazilian customers of ‘Grana’ might proceed use conditionally.
4. Gorgonzola (Italy)
Prior Brazilian customers of ‘Gorgonzola’ might proceed use underneath transitional guidelines.
5. Fontina (Italy)
Prior customers in all Mercosur states recognised in the event that they used the time period for 5 years or longer.
6. Gruyère (France)
Recognised Mercosur prior customers for names together with ‘Gruyère’, ‘Gruyerito’, ‘Gruyer’, and others.
French cheeses akin to Bleu d’Auvergne, Brie de Meaux, Comté, Roquefort, and Saint-Marcellin amongst others can even be protected.
When will the brand new tariff regime kick in?
The brand new guidelines might be rolled out progressively over as much as 10 years to keep away from market disruptions in each the EU and Mercosur.
When will the EU-Mercosur settlement be enacted?
The following step is for the EU and Mercosur negotiators to formally signal the settlement – which may occur as early as subsequent week.
