What’s in for dairy from the EU-Mercosur agreement?

The EU has taken a major step toward a new deal with Mercosur that could open up fresh opportunities for the dairy sector on both sides of the Atlantic.

On January 9, 2026, the EU Council agreed to sign the agreement, clearing a major hurdle to formally adopt a treaty 25 years in the making.

The vote was marred by farmer protests from across the beef, poultry and grain sectors this week, but the European Dairy Association, the body representing EU processors, has been among the advocates of the trade agreement.

Here are some of the reasons why dairy exporters both sides of the Atlantic could benefit under the new trade relationship.

What does EU-Mercosur FTA means for dairy?

The agreement secures reciprocal tariff reductions for cheese, milk powder and infant formula.

The deal also protects 344 EU GI (geographical indication) products to ensure producers benefit from these key authenticity markers abroad.

Additionally, the treaty ensures that disease outbreaks in one EU region do not block dairy exports from unaffected zones and secures unified import rules across the bloc including faster, clearer audits and checks.

What are the new quota rates for EU dairy?

The EU-Mercosur agreement introduces new quotas and will phase out the current tariffs for key dairy products including cheese (currently facing a 28% import tariff); milk powder (28% tariff), and infant formula (18% tariff).

Cheese – which accounts for nearly a third of EU dairy exports to Mercosur – has secured a quota that’s nearly 10 times larger than what’s currently being exported by the bloc.

This means EU producers have a healthy headroom for export growth in the coming years.

Dairy exports to Mercosur amounted to around $120m between 2015-2019 according to a USDA report.

The EU and the US compete in categories such as lactose, milk, cream concentrate, infant formula and milk albumin.

What do Mercosur dairy producers gain?

Mercosur dairy exporters secure improved market access to the EU, with larger quotas and tariff advantages.

The quotas will gradually increase while tariff rates will decrease, to the maximum TRQs listed below.

What are the implications for GI‑protected cheeses?

Many EU cheeses enjoy protected status through EU quality schemes such as PGI and PDO. These indications are seen as a marker of trust and authenticity and enable producers to command price premiums. Just within the EU, GI products generate €75bn per year in revenue.

The EU-Mercosur agreement enshrines legal protections for GI cheeses, allowing producers to maximize value and reduce unfair competition.

Below are some of the EU cheeses protected under the treaty – though Mercosur dairy producers keep the right to continue using several well‑known cheese names, to avoid consumer confusion in those markets.

1. Queso Manchego (Spain)

Uruguay has recognised prior users who may continue using the term only under strict conditions.

2. Parmigiano Reggiano (Italy)

Prior users allowed to keep using ‘Parmesão’ (Brazil), ‘Parmesano’ (Argentina, Paraguay, Uruguay), and ‘Reggianito’ under restrictions.

3. Grana Padano (Italy)

Prior Brazilian users of ‘Grana’ may continue use conditionally.

4. Gorgonzola (Italy)

Prior Brazilian users of ‘Gorgonzola’ may continue use under transitional rules.

5. Fontina (Italy)

Prior users in all Mercosur states recognised if they used the term for five years or longer.

6. Gruyère (France)

Recognised Mercosur prior users for names including ‘Gruyère’, ‘Gruyerito’, ‘Gruyer’, and others.

French cheeses such as Bleu d’Auvergne, Brie de Meaux, Comté, Roquefort, and Saint-Marcellin among others will also be protected.

When will the new tariff regime kick in?

The new rules will be rolled out progressively over up to 10 years to avoid market disruptions in both the EU and Mercosur.

When will the EU-Mercosur agreement be enacted?

The next step is for the EU and Mercosur negotiators to formally sign the agreement – which could happen as early as next week.