The EU–MERCOSUR Deal Changes the Game for Ukrainian Agri-Food Exports

The European Union and MERCOSUR nations have agreed upon a trade agreement on January 17, 2026, with provisional implementation since May 1, 2026. This arrangement might grant MERCOSUR countries a 17% growth in EU exports, particularly in agriculture, according to economic expert Ivan Us, a PhD in Economics and Associate Expert at the "United Ukraine" Think Tank.

The deal encompasses quotas for beef, poultry, sugar, honey, rice, and ethanol, mirroring some of the sensitive product categories in which Ukraine has recently improved its output. However, the sugar quota is significantly smaller than actual exports in 2024, with only 33% of the poultry quota used by early July 2026. MERCOSUR quotas do not diminish Ukrainian volumes, but competition arises from price pressure.

Ukrainian producers might shift their focus to countries like the UK, which retains duty-free access until 2028. Despite the potential threats, European farmers perceive both MERCOSUR and Ukrainian exports as one unified danger. Polish farmers, who are highly sensitive to Ukrainian agricultural imports, voted against the deal and plan to challenge it at the EU Court of Justice.

This creates a double pressure scenario for Ukraine, as European governments face diminishing political room for further liberalization with Ukraine. The MERCOSUR safeguard regulation, which allows for investigation and possible suspension of preferences if prices fall below 5% below the EU price, could serve as a model for Ukraine.

By focusing on deeper processing, market diversification, leveraging logistical advantages, and forming partnerships with European brands and retailers, Ukraine can transform competition from MERCOSUR into a growth opportunity.