Monthly Digest
May 2026
The EU-Mercosur trade agreement enters provisional application on May 1. The biggest shift in Brazil's trade policy in decades.
Updated May 19 — month in progress
EU-Mercosur: provisional application begins
May 1, 2026 marks the biggest shift in Brazil's trade rules since Mercosur's creation in 1991. The EU-Mercosur trade agreement entered provisional application, meaning the trade pillar is legally in force even though ratification by all 27 EU member states is still pending.
What changed on May 1
- Immediate tariff elimination: approximately 30% of EU tariff lines to Brazil saw their import duty drop to 0% on day one. These include many industrial inputs, chemicals, and machinery components.
- Preferential rates: additional tariff lines received immediate partial reductions, with phase-out schedules of 4, 7, 10, or 15 years depending on the product's sensitivity.
- Public procurement: EU companies can now participate in Brazilian federal procurement tenders above the threshold (approximately R$ 4 million for goods). State-level procurement access follows a phased timeline.
- Services and investment: EU companies get improved access for business travel, professional services, and investment protection.
- Geographic Indications: 357 EU GIs now protected in Brazil — from Champagne to Prosciutto di Parma. Brazilian products using these names have a transition period.
How to claim preferential rates
To import EU goods at the preferential rate: (1) the product must originate in the EU per the agreement's Rules of Origin, (2) the exporter must provide a proof of origin (EUR.1 certificate or origin declaration), (3) the Brazilian importer must claim the preference on the DI/DUIMP at the time of customs clearance. Without the origin proof, full MFN rates apply.
Rules of Origin: key requirements
The EU-Mercosur Rules of Origin determine which products qualify for preferential tariff treatment. Key rules:
- Wholly obtained: agricultural products, minerals, and fish must be wholly obtained in the EU (or Mercosur for reverse direction).
- Sufficient transformation: manufactured goods must undergo sufficient processing in the EU. The specific rule varies by product — typically a change of tariff heading (CTH) or value-added threshold (often 40–50% of ex-works price).
- Cumulation: EU-Mercosur bilateral cumulation is allowed. Materials originating in Mercosur used in EU manufacturing count as EU-originating for the purpose of re-export to Mercosur.
- Tolerance: a general tolerance of 10% of ex-works price for non-originating materials is allowed (15% for textiles).
- Direct transport: goods must be shipped directly from the EU to Brazil (or via a third country without entering commerce). Transshipment is permitted; further processing is not.
Sector-by-sector impact (early May data)
Machinery (HS 84)
93% of EU machinery exports to Brazil will see tariff elimination within 10 years. Many NCMs in chapters 8428–8479 already have 2–4pp reductions. German and Italian machinery exporters are the primary beneficiaries.
Chemicals (HS 28-38)
Full liberalization within 10 years for most chemical products. Immediate reductions on specialty chemicals and pharmaceutical intermediates. German BASF, French Air Liquide, and Dutch DSM products benefit.
Automotive (HS 87)
TRQs for EU vehicles: 50,000 units in year 1 at preferential rates (17.5% vs 35% MFN). Quota increases annually. Auto parts see faster liberalization — many at 0% within 7 years.
Wine and spirits (HS 22)
EU wines: tariff elimination over 10–12 years. Spirits: 8–10 year elimination. EU oenological practices recognized in Brazil. French, Italian, Spanish, and Portuguese wines are the main beneficiaries.
Dairy and food (HS 04, 16-22)
TRQs for EU cheese (30,000 tons at reduced rates), chocolate, biscuits, and processed food. GI protection means Brazilian producers can no longer use names like "Parmesão" for domestic products (transition period applies).
Other May updates
- Ex-Tarifário: SDIC opened the Q2 2026 application window (May 1–31) for new BK and BIT exemption requests. Results expected in August.
- MAPA: updated phytosanitary requirements for fresh fruit imports from Peru and Chile — new pest risk assessment completed for table grapes and blueberries.
- Anatel: published updated guidelines for e-SIM certification in smartphones. All devices with e-SIM capability must have separate homologation for the e-SIM module.
- INMETRO: published the definitive list of OCPs authorized to certify USB-C chargers under the March 2026 expansion (4 accredited OCPs).
This page is updated throughout the month
We add new changes as they are published. Last update: May 19, 2026. Check back at the end of the month for the complete digest.