For industrialised, export-oriented CEE countries, the EU–Mercosur agreement is incrementally beneficial

For the Visegrád countries and Romania, the EU–Mercosur agreement is about a gradual realignment within global value chains. Available data suggest that only Poland has strong structural reasons for concern, while Hungary, Czechia and Slovakia stand to benefit—both directly and indirectly—from expanded industrial exports.

Although we have dealt with the EU-Mercosur deal before on CET, it merits renewed attention following developments earlier this year. On 9 January, a qualified majority of EU member states (21 out of 27) approved the signing of the long-negotiated EU–Mercosur trade agreement, marking a significant step forward for one of the world’s largest prospective free-trade areas. European Commission President Ursula von der Leyen is expected to travel to Paraguay this week to formally sign the agreement with Mercosur leaders.

Despite this breakthrough, the deal remains politically contested. France, Poland and Hungary continue to oppose it, citing concerns over agriculture and domestic political sensitivities. The agreement has also not yet entered into force: it still requires approval by the European Parliament, with a final vote expected in April or May 2026, followed by national ratification procedures.

What the agreement changes

The EU–Mercosur agreement aims to gradually eliminate tariffs on roughly 90–92% of goods traded between the EU and the Mercosur bloc (Argentina, Brazil, Paraguay and Uruguay). For the EU, the primary gains lie in industrial exports—notably cars, machinery, chemicals and pharmaceuticals—which currently face high tariffs in Mercosur markets, in some cases as high as 35%.

For Mercosur countries, the agreement improves access to the EU market for agricultural and food products, though this access is constrained by quotas, long transition periods and safeguard clauses designed to protect sensitive EU sectors. Beyond trade, the deal is also framed geopolitically as a tool to diversify EU trade relations, deepen ties with Latin America, and reinforce rules-based trade amid rising global protectionism.

Uneven exposure in Central and Eastern Europe

For Central and Eastern Europe—particularly the Visegrád countries (Czechia, Hungary, Poland, Slovakia) and Romania—the implications are uneven, reflecting different trade structures and degrees of exposure to Mercosur markets.

Hungary and Poland are the most vocal opponents of the agreement in CEE, yet their economic exposure to Mercosur differs markedly.

Trade balance between V4 + Romania and Mercosur, 2024

Source: Eurostat (International trade of EU and non-EU countries since 2002 by SITC)

Eurostat data on goods trade in 2024 show that Czechia, Hungary and Slovakia run significant trade surpluses with Mercosur, while Romania records a moderate deficit. Poland stands out, however, with a large and structurally negative trade balance.

Hungary, Czechia and Slovakia export mainly manufactured goods—machinery, vehicles and electrical equipment—to Mercosur markets. These are precisely the sectors that benefit most from tariff elimination under the agreement.

In addition, these countries benefit indirectly through their integration into European value chains. Factories in Central and Eastern Europe supply components and finished products to Germany, which in turn exports cars and machinery to Mercosur markets. By lowering tariffs at the final stage of export, the agreement enhances the competitiveness of the entire supply chain, not only of firms that sell directly to Mercosur.

An op-ed published in a pro-government Hungarian outlet lately argues that the EU–Mercosur agreement carries tangible economic significance for Hungary. According to the article, Hungary’s trade with non-EU markets currently supports around 805,000 jobs, while exports to Mercosur countries alone account for approximately 14,000 jobs. The author contends that these figures are likely to rise once Hungary’s competitive disadvantage stemming from high customs duties is eliminated, allowing Hungarian manufacturers to compete on better terms in Mercosur markets.

Poland’s benefits are less immediate and more long-term

Poland imports substantial volumes of agricultural commodities, feedstock and raw materials from Mercosur, while its industrial exports to the region—although growing—do not offset these inflows. This gives Warsaw tangible reasons for caution, particularly given the political salience of farming in Poland.

Poland’s Ministry of Agriculture and Rural Development has warned that the EU–Mercosur agreement could expose Polish farmers to unfair competitive pressure, raising the risk that domestic agri-food products could be “pushed out of EU markets” by imports from Mercosur countries. In an official statement opposing the deal, the ministry argued that its provisions “may damage the position of Polish products on European markets” and stressed the need for stronger and more targeted safeguards.

Polish officials have also criticised the scope of tariff concessions and protective measures. The agriculture minister has stated that the agreement “cannot be accepted in its current form”, arguing that sensitive sectors—such as poultry production—require tailored protections that reflect the specific structure of Polish agriculture.

Poland may, in time, benefit from expanding industrial trade with Mercosur, but such gains are long-term, diffuse and politically less visible than the short-term risks perceived in agriculture. In this respect, Poland is not less industrialised than its Central European peers, rather, it is less tightly embedded in export-oriented EU value chains that stand to benefit most immediately from the EU–Mercosur agreement.

Why Romania is not opposing the deal

Romania presents an apparent paradox. Despite having one of the highest shares of agricultural employment in the EU, it is not among the opponents of the agreement. This is largely because most Romanian farmers are not direct competitors with Mercosur exporters in the EU market.

Romanian agriculture is dominated by small-scale, low-capital farms, focused on cereals, subsistence production and intra-EU markets. It is only weakly integrated into the global agri-food value chains—such as beef, poultry, sugar or soy—where Mercosur exporters are most competitive. As a result, the perceived threat from Mercosur imports is limited.

Agriculture: concerns over imports and the EU’s safeguards

Although agriculture has often been cited as the core reason for opposition to the deal, the agreement includes multiple layers of protection for EU farmers. These include strict tariff-rate quotas for sensitive products such as beef, poultry, sugar and ethanol; long transition periods of up to 10–15 years before full liberalisation; and safeguard mechanisms allowing the EU to suspend concessions if imports disrupt domestic markets. EU sanitary, phytosanitary and environmental standards remain fully applicable.

Crucially for Central and Eastern Europe, the agreement also provides strong protection for geographical indications, preventing Mercosur producers from using protected European product names.

That is why it is assumed that Hungary’s opposition is driven less by economic fundamentals than by political alignment within the European Parliament, particularly solidarity with France’s National Rally—the largest party in the Patriots for Europe group, of which Hungary’s governing Fidesz is also a member. Over time, however, this opposition may become more symbolic, as Hungary’s economic balance under the agreement appears increasingly positive. Czechia and Slovakia, meanwhile, have adopted a more cautious and less vocal stance, reflecting modest but positive economic stakes.

Overall, for most Central and Eastern European countries, the EU–Mercosur agreement is not transformative, but it is incrementally beneficial—especially for industrial, export-oriented economies integrated into EU supply chains.