EU-Mercosur Sector
Automotive: Vehicles & Parts
The most sensitive sector in the agreement. Brazil's 35% vehicle tariff is the highest in Mercosur — reduction via TRQs and a 15–30 year timeline.
Vehicles: tariff-rate quotas (TRQs)
Brazil's 35% import duty on passenger vehicles is one of the highest in the world. Rather than eliminating it immediately, the EU-Mercosur agreement uses tariff-rate quotas (TRQs) — a fixed number of vehicles can enter at a preferential rate, with the full 35% applying to any imports above the quota.
| Period | TRQ volume | In-quota rate | Over-quota rate |
|---|---|---|---|
| Year 1 (2026) | 50,000 units | 17.5% | 35% |
| Year 5 (2031) | 60,000 units | 14% | 35% |
| Year 10 (2036) | 75,000 units | 8.75% | 28% |
| Year 15 (2041) | Unlimited | 3.5% | — |
| Year 18+ (2044) | Unlimited | 0% | — |
TRQ allocated on a first-come, first-served basis among EU exporters. Volumes and rates are approximate — refer to Annex 2-A for exact figures.
Auto parts: faster liberalization
Unlike finished vehicles, auto parts benefit from faster tariff elimination:
| Product | HS | MFN | Timeline to 0% |
|---|---|---|---|
| Engine parts | 8409 | 14–18% | 7 years |
| Gearboxes, transmissions | 8708.40 | 14–18% | 10 years |
| Brake systems | 8708.30 | 14–18% | 7 years |
| Body parts (doors, hoods) | 8708.29 | 14–18% | 10 years |
| Wheels and rims | 8708.70 | 14–18% | 7 years |
| EV batteries | 8507.60 | 14–16% | 7 years |
| Tires | 4011 | 16% | 10 years |
EV advantage
Electric vehicles and EV components benefit from faster liberalization under the agreement, reflecting both blocs' climate commitments. EV-specific parts (battery packs, electric motors, charging equipment) are generally in the 7-year elimination category rather than the 15–30 year timeline for conventional vehicles.
Regulatory requirements
- INMETRO certification — all vehicles and regulated auto parts must have INMETRO certification before import. This includes crash testing, emissions compliance, and component certification.
- IBAMA emissions — vehicles must comply with PROCONVE L-7 (equivalent to Euro 6). EU vehicles generally comply but need Brazilian certification.
- CONTRAN registration — vehicle type approval required from DENATRAN/CONTRAN.
- Brazilian vehicle plug standard — EVs must use the Brazilian CCS2 charging standard.
Rules of Origin for automotive
- Finished vehicles (8703): MaxNOM 45% (maximum 45% non-originating materials by ex-works price) OR regional value content of 55%.
- Auto parts (8708): CTH (change of tariff heading) or MaxNOM 50%.
- EV batteries (8507.60): Cell-level origin rule — battery cells must be manufactured in the EU (assembly of cells into packs is not sufficient).
- Cumulation: Mercosur-originating components used in EU vehicle assembly count toward EU origin requirements.
Key EU automakers
- Germany — Volkswagen, BMW, Mercedes-Benz, Porsche. VW already has Brazilian manufacturing; premium imports benefit most.
- France — Stellantis (Peugeot, Citroën), Renault. Both have Brazilian operations; EU-made models benefit.
- Italy — Stellantis (Fiat), Ferrari, Lamborghini. Fiat is the largest automaker in Brazil; high-end imports benefit.
- Czech Republic/Slovakia — Škoda, Hyundai-Kia EU plants. Cost-competitive EU production for Brazil.