EU-Mercosur tariff quotas and where the ceiling bites

In the EU-Mercosur agreement, quota categories are a narrow exception, not the rule. Almost every tariff line scheduled for reduction falls to zero on a fixed annual timetable, regardless of volume. Only a small group of products carry a cap instead, reflecting Brazil's choice to phase in exposure on those specific goods. For an export manager, the first question is whether a product's NCM code sits inside one of these categories at all, since that changes how shipment timing and cost planning work.

Which products carry a quota on the Brazil side

Most of the tariff rate quota volume in this agreement sits on the other side of the relationship, on Mercosur exports going into the EU, in products such as beef and sugar; the fact pack behind this page does not carry figures for that side, so none are quoted. On the EU-to-Brazil side, quotas are rare. The clearest case a European exporter is likely to meet is chocolate and cocoa preparations, grouped under category CH2.

CH2 covers four Brazilian tariff codes: 1806.10, 1806.31 and 1806.32 (chocolate in blocks, slabs or bars, filled and not filled), and 1704.90.10, a sugar confectionery code. All four work the same way: a reduced rate on a set tonnage, then a jump to a higher out-of-quota rate for the rest of the year.

The fullest published schedule is for 1806.31, filled chocolate in tablets, slabs or bars and related filled cocoa preparations, running 14 years, with the rate falling and the tonnage rising every 1 January until both disappear.

Year	In-quota rate	Quota (tonnes)	Out-of-quota rate
0	18.7%	1,890	20%
1	17.3%	2,082	20%
2	16.0%	2,274	20%
3	14.7%	2,466	20%
4	13.3%	2,658	20%
5	12.0%	2,850	20%
6	10.7%	3,042	20%
7	9.3%	3,234	20%
8	8.0%	3,426	20%
9	6.7%	3,618	20%
10	5.3%	3,810	20%
11	4.0%	4,002	20%
12	2.7%	4,194	20%
13	1.3%	4,380	20%
14 and later	0%, no quota	none	0%

The other two CH2 codes start from a different base. In year 0, 1806.10 carries an in-quota rate of 16.8% on a quota of 90 tonnes and an out-of-quota rate of 18%. Code 1704.90.10 carries 18.7% on 771 tonnes with an out-of-quota rate of 20%. Both reach 0% with no quota from year 14 onward.

Quota and conditional categories of every kind, CH2 among them, alongside groups labelled 15V, TRQ-1 through TRQ-4, CH1, T1, FP and SW/12, cover 45 tariff lines out of the 10,029 in the whole Mercosur offer, about 0.4% of the schedule. The rest of the agreement runs on straight annual staging with no volume cap. For most products on the EU-Brazil route, a quota simply will not apply.

How the quota is administered

The CH2 quota is administered first come, first served, and shared across the whole EU, with no allocation by country. No member state holds a reserved sub-quota, and no mechanism sets aside tonnage for any one exporter. Every EU-origin shipment declared under CH2 draws against the same pool, in the order its customs declaration is processed.

That structure changes how volume planning works. A shipment's fate depends on every other EU chocolate exporter selling into Brazil under the same code, not on this company's own schedule alone. A large shipment cleared early in the year by a competitor in another member state can exhaust the annual tonnage before a company's own goods reach the border, with no warning that the ceiling was close. Once the pool is used up, every later shipment that year pays the out-of-quota rate, regardless of the exporter's size or country of origin.

This makes the quota closer to a race than a fixed entitlement. Nothing in the agreement describes a reservation system that lets an importer lock in a share of the tonnage ahead of time. The practical response: treat the in-quota rate as a possibility to plan toward, not a rate to count on, and clear customs as early in the calendar year as the commercial cycle allows.

What happens above the ceiling

Once the annual tonnage for 1806.31 is filled, imports move to the out-of-quota rate of 20%. Brazil's applied MFN duty on the same code today, outside any agreement claim, is 18.00%, confirmed by the Portal Único Siscomex customs simulator on 7 September 2026. Twenty is higher than eighteen. A shipment that misses the quota and pays the agreement's out-of-quota rate ends up worse off than one that simply enters under ordinary MFN treatment.

That makes the preference conditional in a way worth stating plainly: claiming EU-Mercosur origin for filled chocolate is only worth doing while that year's quota is still open. Above it, there is no cost reason to invoke the agreement at all.

The same caution applies inside the quota at the start. In year 0, the in-quota rate for 1806.31 is 18.70%, still fractionally above today's applied 18.00%. It only turns cheaper than the ordinary route from year 1, when it drops to 17.30%. For a shipment clearing before 1 January 2027, the "preferential" quota rate for chocolate does not beat the MFN duty Brazil already applies, and filing a statement on origin under Annex 3-C buys no rate benefit until the schedule steps forward.

Planning shipment volumes around a quota

A few consequences follow from how the CH2 quota works. Know in advance which regime a shipment will clear under: in-quota, out-of-quota, or ordinary MFN with no agreement claim, since the rate and paperwork differ. Watch the year boundary too: the reduced rate and the higher tonnage step forward on 1 January only, so a shipment clearing on 31 December sits under one year's terms and one clearing two days later sits under the next, though nothing about the goods has changed. Year 0 runs from the date the trade part of the agreement began applying, 1 May 2026, to 31 December 2026.

The ceiling is not static either. For 1806.31 it rises from 1,890 tonnes in year 0 to 4,380 tonnes by year 13, before the quota and the preference disappear together in year 14, when the code becomes duty free with no cap. A volume that misses the ceiling this year may clear comfortably inside it years later. None of this substitutes for checking, at shipment time, whether that year's tonnage is still open.

Sources

• Mercosur tariff offer, Annex 2-A, Section A, category CH2 schedule for NCM 1806.31, 1806.10 and 1704.90.10: planalto.gov.br, verified 7 September 2026.
• Applied MFN duty for NCM 1806.31.10, 18.00%: Portal Único Siscomex customs simulator, queried 7 September 2026.
• Whole schedule, 10,029 tariff lines and category shares, including the 45-line quota and conditional group: Mercosur offer, verified 7 September 2026.
• Provisional application of the interim trade agreement from 1 May 2026: Decreto nº 12.953/2026, 28 April 2026.
• Rules of origin, statement on origin under Annex 3-C: EU-Mercosur interim trade agreement text, Article 3.17.

Quota schedule verified 7 September 2026.