EU Mercosur Australia deals expand access but limit near term trade growth
Recent trade agreements between the European Union, Mercosur countries, and Australia are expected to influence global beef markets in 2026. However, according to RaboResearch, their immediate effects on trade volumes are likely to remain limited.
These agreements improve market access rather than increase actual shipments. RaboResearch analyst Angus Gidley Baird explains that structural factors, including already high trade levels, restrict short-term growth despite new deals being finalized.
The EU Mercosur agreement, which started on May 1, allows Mercosur countries to export about 47,000 metric tons of beef into the EU at zero tariff under the Hilton Quota. It also introduces a new quota that will gradually increase to 99,000 metric tons with a 7.5% tariff. While this improves competitiveness, exports are already strong, limiting further volume increases.
Similarly, the Australia EU agreement removes a 20% tariff on 3,389 metric tons of beef and creates a new quota of 30,600 metric tons. However, the benefits will develop slowly due to a 10-year implementation period.
Other global factors are adding complexity to beef trade flows. China has renewed export approvals for more than 400 US beef plants, which could support demand. Yet, limited cattle supply and higher prices in the US are expected to restrict export growth. China’s safeguard measures and quota system also continue to influence import patterns.
Global supply challenges remain a key concern. Beef production fell by 2.5% in early 2026 and is expected to decline by 2.2% for the full year. Major producers such as Brazil, the United States, and China are all facing reduced output.
At the same time, cattle prices have increased between 2% and 9% across most regions, with Brazil recording the highest rise. These tightening conditions reduce the ability to expand trade quickly.
Overall, global beef trade will depend on supply availability and how efficiently countries use quota limits under the new agreements.
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