Expanding Horizons: How the EU–Mercosur Agreement Benefits Malta’s Economy

January 17 2026 09:11:09 by PCLMedia

The EU–Mercosur Partnership Agreement represents a landmark trade deal between the European Union and four South American countries—Argentina, Brazil, Paraguay and Uruguay. For Malta, a small and open economy that relies heavily on international trade, this agreement opens significant new opportunities for businesses, farmers, service providers and workers, while maintaining the EU’s high standards on safety, quality and sustainability.

Trade: A Cornerstone of Malta’s Economy

Trade is vital to Malta’s economic resilience and growth. Exports from Malta and across the EU currently support around 75,000 Maltese jobs, equivalent to one in every four jobs on the island. Strengthening access to fast-growing markets such as Mercosur is therefore not only a commercial opportunity, but also a strategic investment in Malta’s long-term prosperity.

Malta already enjoys a close trade relationship with Mercosur countries, with total trade amounting to €94 million. The EU–Mercosur Agreement is set to significantly expand this relationship by reducing trade barriers and opening new markets for Maltese exporters.

Lower Tariffs, More Competitive Exports

One of the most immediate benefits of the agreement is the elimination of tariffs on 91% of all products traded between the EU and Mercosur. This will make Maltese exports more competitive by reducing costs and improving market access.

Maltese producers — both industrial and agri-food — will benefit from:

- Lower or zero tariffs on exports
- Reduced administrative and customs burdens
- Greater legal certainty and predictability when trading with Mercosur partners

As a result, Maltese firms, including small and medium-sized enterprises (SMEs), will find it easier and cheaper to do business in South America.

New Opportunities for Maltese Farmers and Agri-Food Producers

Currently, agri-food products account for only 5% of EU exports to Mercosur, largely due to prohibitive tariffs and regulatory restrictions. In some cases, tariffs of up to 55% have effectively closed Mercosur markets to EU products.

The EU–Mercosur Agreement will remove these barriers, allowing Maltese farmers and agri-food producers to access new export opportunities in a region with a growing middle class and rising demand for high-quality food products.

Importantly, the agreement includes strong protections for EU farmers:

- Tariff-rate quotas will cap imports of sensitive products:

- 99,000 tonnes of beef (1.5% of EU production)
- 25,000 tonnes of pigmeat (0.1%)
- 180,000 tonnes of poultry (1.3%)
- A safeguard clause will allow the EU to act swiftly in the event of sudden import surges or market disruption—an unprecedented measure in EU trade agreements.
- The European Commission has committed to supporting farmers promptly should any significant market disturbance occur.

Crucially, EU food safety and quality standards will not be compromised. All Mercosur products entering the EU must comply fully with the Union’s strict regulations, ensuring continued protection for consumers and fair competition for producers.

Strong Sustainability Commitments

Sustainability is a central pillar of the agreement. Both sides commit to upholding international environmental and labour standards, including climate-related commitments and responsible agricultural practices. These provisions ensure that increased trade goes hand in hand with environmental protection and social responsibility.

Easier and Cheaper Trade in Services

Services are another key area where Malta stands to gain. Maltese exports of services to Mercosur currently amount to €31.6 million annually, with major contributions from:

- Tourism (€24.1 million)
- Cultural services (€4.3 million)
- Business services (€2.2 million)

The agreement will further open Mercosur markets in high-value sectors such as:

- Financial services
- Telecommunications
- Transport and logistics
- Postal and courier services
- Digital trade
- Environmental services

By improving market access and reducing regulatory barriers, Maltese service providers will be better positioned to expand their footprint in South America.

Empowering Maltese Small Businesses

Small businesses are the backbone of Malta’s export economy. Ninety-three per cent of Maltese exporters are SMEs, which often face disproportionate costs and administrative hurdles when exporting beyond the EU.

The EU–Mercosur Agreement directly addresses these challenges by:

- Eliminating tariffs and simplifying customs procedures
- Reducing red tape through easier product certification
- Improving access to public procurement opportunities
- Providing targeted support through dedicated Small Business Coordinators
- Offering clear, accessible online information on doing business in Mercosur countries

These measures will enable Maltese SMEs to compete on a more level playing field and seize new growth opportunities abroad.

A Strategic Opportunity for Malta

The EU–Mercosur Partnership Agreement is more than a trade deal—it is a strategic framework for economic growth, job creation and sustainable development. By opening new markets while safeguarding farmers, consumers and standards, the agreement offers tangible benefits for Maltese businesses and workers alike.

For Malta, the deal strengthens economic diversification, boosts export potential, and reinforces the country’s role as an outward-looking, globally connected economy within the European Union.