Question Period Note: CANADA-MERCOSUR FREE TRADE AGREEMENT

Q1 - How will the beef sector be affected by a trade agreement with Mercosur?
Q2. How will the sugar sector be affected by a trade agreement with Mercosur?
Q3. What actions is the Government taking to address differences in labour and environmental standards between imported and domestic products?
Q4 How is the Government protecting Canadian food and animal health safety risks?
Q5. What are Canada’s key agri-food export priorities in Mercosur?
Q6. Will the Government protect supply managed products during these negotiations?
Q7. What will the Government do if sensitivities regarding Mercosur/Brazil are raised with regards to imports of poultry/chicken and spent fowl?

R1 - Canada’s beef producers are world - class.
While beef access is a priority for Mercosur, we have clearly communicated that Canada’s beef sector is highly sensitive to imports from the region.
All imports of food and animal products must meet Canada’s rigorous animal health and food safety standards.
We are committed to working closely with the beef sector as negotiations progress and identifying opportunities for Canadian exports of niche or value-added products to the Mercosur markets.
Consultations with the sector, provinces and territories will continue as negotiations advance.
R2 - While increased access to refined sugar is of interest to Mercosur, we understand the concerns raised by Canadian sugar beet producers and refiners, given Mercosur’s competitive advantages.
The Government is actively consulting with the sector to ensure Canada’s sugar industry remains stable and competitive.
R3 - The Government is aware of the concerns expressed by stakeholders regarding deforestation rates and forestry management practices in Mercosur countries.
Canada’s negotiations aim to advance economic interests across our country while upholding our environmental, labour and food safety standards. Canada also seeks high levels of environmental protection, food safety, and labour rights from its trading partners.
Agriculture and Agri-Food Canada is working with Global Affairs who is leading the environment negotiations and sharing perspectives from the sector.
R4 - Canada’s import requirements are grounded in science and designed to protect animal health and food safety.
The Canadian Food Inspection Agency is responsible for safeguarding the health of animals in Canada. Other countries open their doors to Canadian products because they trust our food and animal health system and the strong oversight we bring to our regulatory role.
A free trade agreement with Mercosur, or any other trading partners, will not change Canada’s rigorous animal health and food safety requirements.
R5 - Mercosur is a highly protected market, particularly in agriculture, with high tariffs and non-tariff barriers
While negotiations are ongoing and final outcomes are not yet known, stakeholders have identified potential opportunities for cereals and products of the milling industry (wheat, malt, barley), pulses, sheep, animal genetics, processed foods, and pet food.
R6 - Canada’s supply management system supports producers by providing the opportunity to receive fair returns for their labour and investments; brings predictability and stability for processors; avoids surplus and shortage; and it also benefits consumers by providing them with a steady supply of high-quality products.
Supply management is very important for Canadians and for the Government. It is very clear for the Government that supply management must be protected.
Canada will continue to open new markets and opportunities for Canadian businesses and consumers, while preserving, defending and protecting Canada’s supply management system.
The passage of Bill C-202 [the newly amended Department of Foreign Affairs, Trade and Development Act Act] reflects this commitment and ensures that Canada will not accept any commitments in a Free Trade Agreement with Mercosur that would increase market access into Canada.
R7 - We are aware of the sensitivities raised by representatives of the Canadian poultry sector and have engaged with them throughout the Mercosur negotiations.
We will preserve, protect, and defend the supply management system, including in its trade negotiations with Mercosur.
The entry into force of C-202 further strengthens this commitment.

Mercosur is a trading bloc with a combined GDP of over US$3.0 trillion and a population of 282 million (as of 2024). Global Affairs Canada has identified key sectors that would benefit from a Canada Mercosur Free Trade Agreement as: Industrial machinery, information and communication technology, aerospace, plastics, pharmaceuticals, services, and fertilizers.
In the agricultural sector, Mercosur’s competitiveness in these areas raised significant concerns, particularly in defensive sectors such as beef, poultry and sugar. Some limited export interests were identified in grains, cereals, pulses, processed foods, pet food, and animal feed.
Environmental non-governmental organisations have raised significant concerns regarding potential increases in deforestation in the Amazon rainforest related to agricultural trade.
Brazil is the world’s largest exporter of beef. Argentina and Uruguay are also large exporters, ranked 7th and 11th, respectively. Paraguay is also cost-competitive. Overall, the beef industry in Mercosur has lower production costs than in Canada.
Between 2022 and 2024, Canadian annual beef imports from Mercosur countries averaged $109 million: $69 million from Uruguay, $25 million from Brazil, $11 million from Argentina and $4 million from Paraguay. Most of these imports came under Canada’s duty-free World Trade Organization most favoured nation beef quota as well as through supplemental imports, which are permitted in certain circumstances, such as when there is a need for the product or a reasonable substitute is not available domestically. Over access imports from Mercosur have increased since 2024, representing over half in 2025.
While Uruguay has had sanitary and phytosanitary (SPS) access for beef to Canada for many years, partial access has only been granted to the other three countries in recent years: 2016 for Argentina; 2022 for Brazil, with further (but still partial access) in 2024; and 2024 for Paraguay. Brazil’s export potential is particularly constrained, as many of its major beef producing states remain ineligible to export to Canada due to sanitary restrictions related to Foot and Mouth Disease.
On May 6, the Canadian Cattle Association and National Cattle Feeders’ Association held a news conference and warned that including beef access in a proposed Mercosur trade deal could flood the domestic market with lower cost imports that do not meet Canada’s animal health and food safety standards, undermining Canadian producers, slowing herd recovery, and risking food security and animal health standards unless the government protects the industry.
When the Canadian Cattle Association (CCA), the Canadian Meat Council (CMC), and the Canadian Pork Council (CPC) appeared before the House of Commons Standing Committee on International Trade as part of its study on Mercosur (CCA on March 10, 2026, and CMC and CPC on March 24, 2026), all three organizations urged caution regarding a potential Canada–Mercosur free trade agreement.
CCA strongly opposed the inclusion of beef market access, citing Mercosur’s significant cost advantages, lack of meaningful reciprocal export opportunities, risks to herd recovery, biosecurity and SPS concerns, and the potential to disrupt Canada’s integrated beef relationship with the United States.
CMC supported trade diversification in principle but emphasized that Mercosur is not a priority market for Canadian beef and pork due to intense competition from large, export‑oriented producers, stressing the need for robust safeguards, enforceable SPS provisions, and mechanisms to manage import surges.
CPC echoed these concerns from a pork sector perspective, highlighting risks of asymmetrical market openings, nontariff barriers limiting Canadian pork exports, differences in standards, and the need for strong safeguards and enforceable protections to prevent market destabilization and ensure fair competition.

• As a key driver of the Canadian economy, we are exploring every opportunity to grow agriculture trade relationships and diversify markets around the world.
• We are working closely with the agriculture sector as talks with Mercosur advance to secure more export opportunities.