European Parliament sends EU–Mercosur trade agreement to court

The European Parliament decided to refer the trade agreement between the European Union and Mercosur to the Court of Justice of the European Union (CJEU), a move that could delay the creation of the world’s largest free trade area, encompassing more than 700 million consumers.

The agreement involves the 27 EU member states and the South American countries of Brazil, Argentina, Paraguay and Uruguay, and the removal of tariffs on more than 90% of bilateral trade, boosting the exchange of goods and services between the two regions.

A legal pause before ratification

The Parliament’s decision does not represent a definitive rejection of the deal, but rather a preventive legal pause. Lawmakers requested the CJEU to assess whether the agreement fully complies with EU treaties and existing regulations, particularly in sensitive areas such as trade policy, environmental protection, and labor standards.

This legal review could delay the agreement’s entry into force for months or even years, depending on how long the court takes to issue its ruling.

A high-impact economic agreement

The EU–Mercosur deal is widely regarded as strategic due to its economic potential. For Europe, it would open up greater export opportunities in sectors such as automobiles, machinery, industrial goods, wines and spirits. For Mercosur countries, it would provide preferential access to the European market for agricultural and agri-industrial products such as beef, soybeans, sugar, rice and honey.

However, the agreement has sparked strong divisions within the European Union, particularly over its potential impact on European farmers and environmental concerns linked to production in South America.

Political debate and mixed reactions

While business groups and several European governments support the deal as a key tool to strengthen competitiveness and diversify the EU’s trade partners, farming organizations and environmental groups warn of possible risks to local production and climate commitments.

From the Mercosur side, governments have reiterated their willingness to move forward with ratification and remain confident that the European judicial review will not permanently derail a process that has been under negotiation for more than two decades.

An uncertain path ahead

Referring the agreement to the Court of Justice marks a new chapter in the long history of the EU–Mercosur pact. Its future now depends on the legal assessment and on the political will of both regions to overcome internal divisions and advance toward deeper economic integration.