Comparison of the Agricultural Production Potential of Mercosur Countries and the EU in the Context of the EU–Mercosur Partnership Agreement

The Mercosur countries (also known as the Southern Common Market countries) and the European Union (EU) Member States are two major global agri-food exporters whose production structures, patterns of specialisation and sustainability standards differ significantly. The upcoming entry into force of the EU–Mercosur Partnership Agreement (EMPA) may alter competitive conditions in the EU agri-food markets, as its most important component—the EU–Mercosur Interim Trade Agreement—provides for tariff liberalisation. The aim of this article is therefore to compare the agricultural production potential of Mercosur and the EU countries using a set of indicators grouped into production factors (land, labour and capital), productivity, production structure, and qualitative sustainability-related factors. The analysis employs comparative and dynamic statistical methods (including compound annual growth rates and measures of variability). The study is based on FAOSTAT data for 2018–2023, complemented by information on regulatory frameworks and EMPA provisions. The results show that agriculture in Mercosur is land-abundant, cost-efficient, and oriented toward export-driven livestock and commodity production, while the EU is characterised by higher capital intensity and significantly higher land and labour productivity. These structural asymmetries, reinforced by lower input costs and less stringent production standards in Mercosur, suggest increased competitive pressure in the EU market after EMPA implementation, particularly in beef, poultry, sugar and ethanol. The findings highlight the need for continuous monitoring of market dynamics and, where necessary, the activation of safeguard mechanisms. The study provides also an updated evidence base to support policymakers in assessing the implications of the EMPA.