Dispute over new EU beef export quota intensifies tensions within Mercosur

The allocation of a new beef export quota to the European Union has triggered tensions among Mercosur countries. The quota, totaling 99,000 tonnes and set to take effect on May 1, has yet to be distributed, as member states struggle to reach an agreement.

The new quota complements the existing Hilton quota and carries a 7.5% tariff. Analysts estimate its total economic value for Mercosur countries at over $600 million. In 2026, it will be allocated proportionally, reaching full capacity gradually over five years.

The composition of the quota is a key issue: 55% is reserved for chilled beef, which has higher value, and 45% for frozen beef. This has intensified competition among countries seeking a larger share of the more profitable segment.

Negotiations between Brazil, Argentina, Uruguay, and Paraguay remain difficult. Uruguay is pushing for a minimum 21% share, while Paraguay is advocating for an equal 25% split among all members, a proposal seen as unrealistic by others.

If no agreement is reached by May 1, a “first come, first served” system could be introduced, potentially leading to increased competition and reduced control over access to the EU market.

Experts warn that failure to reach a deal could damage Mercosur’s credibility as a reliable trade partner.

For Uruguay, the new quota represents an opportunity to expand exports to the EU. With a 21% share, the country could secure more than 20,000 tonnes of additional annual exports, generating significant revenue.

Tags: EU, Beef cattle