Factsheet: EU-Mercosur Partnership Agreement - Opening a wealth of opportunities for people in Luxembourg

The EU-Mercosur Partnership Agreement means that:

• Luxembourgish firms and small businesses will find it much easier to do business in Mercosur countries
• Luxembourgish companies can offer services more easily and more cheaply
• Luxembourgish producers (of industrial and food products) and farmers can export more

Trade is important for Luxembourg’s economy

• 134,000 Luxembourgish jobs are supported by Luxembourgish and EU exports to the world
• That is 1 out of 4 jobs

Luxembourg and Mercosur have a close trade relationship

• Total trade between Luxembourg and Mercosur: €721 million**

Lower to zero tariffs, more and cheaper exports

The agreement will eliminate tariffs on 91% of all products, benefitting virtually all Luxembourgish exports.

*Includes Luxembourgish jobs supported by exports to countries outside the EU and jobs linked to exports from other EU countries to the world.

**Trade in goods (2024) and services (2023).

New opportunities for Luxembourgish farmers

Currently, agri-food products represent only 5% of the EU’s total exports to Mercosur, due to prohibitive tariffs and other restrictions currently in place in Mercosur countries.

As of now, Mercosur tariffs of up to 55% on EU agri-food products essentially close the market for EU products.

The EU-Mercosur deal will remove these tariffs, helping Luxembourgish farmers increase their exports to this region. 

Luxembourgish agri-food exports to Mercosur in numbers:

Supporting Luxembourgish farmers in case of market disturbances

Important measures will be in place to protect the interests of Luxembourgish farmers:

A maximum limit (quota) will be put on the amount of agri-food products imported from Mercosur that benefit from lower tariffs:

• 99,000 tonnes for beef: this corresponds to 1.5% of the EU’s total production;
• 25,000 tonnes of pigmeat: 0.1% of total EU production, and;
• 180,000 tonnes for poultry: 1.3% of total EU production per year.

The deal includes a safeguard clause to protect EU farmers against any sudden increase in imports. This is the first time that such a measure is included in an EU agreement, even for products already subject to a quota.

The Commission stands ready to promptly and strongly assist farmers in the unlikely event of significant market disturbance linked to the agreement.   

High EU standards protecting EU citizens will in no way be compromised: all Mercosur products must comply with the EU’s strict food safety regulations. 

Strong sustainability commitments apply equally to producers on both sides.
 

Easier and cheaper ways to provide services in Mercosur

Luxembourg and the Mercosur countries export many services to each other. 

Luxembourgish exports of services to Mercosur are worth €458 million a year.

In 2023, the main exports of services consisted of: 

• Financial: €328 million
• Business: €43 million
• Transport: €20 million 

The EU-Mercosur agreement will further open the Mercosur services market in sectors such as:

• Financial
• Postal & courier
• Telecommunications
• Transport
• Digital trade
• Environmental

Helping Luxembourg’s small businesses export more to Mercosur

79% of all Luxembourgish exporters are small companies. These companies often find it difficult to export outside the EU, as it comes with extra costs and administrative procedures.

The EU-Mercosur deal will change that by offering more opportunities for small businesses. It will:

• Reduce costs by eliminating tariffs and simplifying customs procedures
• Alleviate the administrative burden by making it easier to certify products for local sale
• Offer a better chance to bid for public contracts by improving access to information
• Provide them with extra help through dedicated Small Business Coordinators
• Open new possibilities through easily accessible online information about doing business in Mercosur countries