The European Commission has signalled its readiness to implement the landmark Mercosur trade agreement on a provisional basis, despite a recent vote by the European Parliament to delay ratification for a legal review. This development underscores the EU's determination to advance its trade agenda, even as internal divisions persist.
Commission President Outlines Conditional Readiness
Speaking at a news conference following a summit of EU leaders in Brussels, European Commission President Ursula von der Leyen stated that the EU would be prepared to act as soon as at least one Mercosur country ratifies the agreement. "There is a clear interest that we ensure that the benefits of this agreement apply as soon as possible," von der Leyen emphasised. "In short, we will be ready when they are ready." She clarified that no formal decision to implement the deal had yet been taken, but the intent is clear.
Legal Authority and Parliamentary Hurdles
At the same conference, Antonio Costa, head of the EU Council representing member governments, affirmed that the executive commission possesses the authority to proceed with interim implementation. This move is likely to provoke criticism, particularly from France, which has led opposition to the pact. The parliamentary hurdle arose on Wednesday when the European Parliament narrowly voted to refer the trade deal to the European Court of Justice for a legal review. This action effectively holds up ratification, as the parliament cannot vote on it until the court issues a ruling, a process that could take several months.
Strategic Importance and Broader Trade Context
The Mercosur agreement is central to Brussels' strategic plan to diversify its trade relations and reduce its historic dependency on the United States, a priority that has gained urgency following periods of antagonism and aggression during Donald Trump's second presidential term. The EU has been actively pursuing trade deals globally, striking agreements from Japan to Mexico, and is expected to sign a similar accord with India later this month.
Economic Impact and Support Base
Supported by South America's cattle-raising nations and European industrial interests, the accord aims to gradually eliminate over 90% of tariffs on a wide range of goods. This includes products from Argentine beef to German automobiles, potentially creating one of the world's largest free trade zones. The deal promises to make shopping cheaper for more than 700 million consumers across the two regions.
Divergent Views Among EU Member States
France, as Europe's major agricultural producer, has pushed for stronger protections for its farmers and has actively sought to delay the pact. In contrast, German Chancellor Friedrich Merz has described the parliamentary vote to delay as "regrettable" and has urged for the provisional application of the agreement. This divergence highlights the ongoing tensions within the EU regarding trade policy and agricultural safeguards.
Ratification Prospects in South America
Ratification is considered virtually guaranteed in South America, where the agreement enjoys broad support. Mercosur consists of the region's two largest economies, Argentina and Brazil, along with Paraguay and Uruguay. Bolivia, the bloc's newest member, is not currently included in the trade deal but could join in the coming years. Venezuela, which has been suspended from the bloc, is also not part of the agreement.
The EU Commission's stance sets the stage for potential provisional implementation, marking a significant step in international trade relations despite legislative delays and internal disagreements.
