In a significant development from Brussels, the European Union's executive arm has indicated a readiness to provisionally apply the extensive free trade agreement with the Mercosur bloc, which includes South American economies such as Argentina and Brazil. This declaration comes in contrast to a recent move by the European Parliament that voted narrowly to defer the ratification process pending a legal review by the European Court of Justice, potentially delaying full implementation by several months.
European Commission President Ursula von der Leyen announced at the conclusion of an EU summit in Brussels that the Commission is prepared to commence provisional application of the deal immediately after at least one Mercosur member state completes its ratification. She stressed the importance of ensuring that the advantages of the partnership are realized promptly, stating, "There is a clear interest that we ensure that the benefits of this agreement apply as soon as possible. In short, we will be ready when they are ready." However, she clarified that no formal decision regarding provisional implementation has been finalized.
Alongside von der Leyen, Antonio Costa, who leads the Council of the EU member governments, affirmed that the European Commission possesses the authority to move forward with an interim application of the trade deal, even as legislative and legal reviews continue.
This prospective advance by the Commission is expected to stir opposition particularly from nations skeptical of the agreement, spearheaded by France. The French government, representing a major agricultural sector in Europe, has advocated for stronger safeguards for its farmers and supports the Parliament's recent initiative to involve the European Court of Justice in validating the agreement's legal soundness.
The Mercosur deal, a cornerstone in the EU’s ambition to diversify its trade partnerships beyond historical reliance on the United States, aims to foster comprehensive economic collaboration with South America's largest markets. This initiative follows a global trend where the EU has recently secured agreements with countries like Japan, Mexico, and is poised to sign a similar pact with India.
Under the trade accord, over 90% of tariffs on goods spanning from Argentina's beef exports to German automobiles would be incrementally eliminated. This creates an expansive free trade zone poised to benefit more than 700 million consumers by reducing consumer costs and enhancing trade flows.
France's reservations stem chiefly from protecting its agricultural producers, resulting in calls to postpone the pact’s ratification. Conversely, German Chancellor Friedrich Merz expressed disappointment with the Parliament's delay, advocating for provisional application to avoid stalling economic opportunities.
The deal's ratification is widely anticipated in Mercosur countries, where the agreement enjoys majority support. The bloc includes Argentina, Brazil, Paraguay, and Uruguay, the region's largest economies, while Bolivia, as the newest member, remains outside the current agreement but may join later. Venezuela remains suspended from Mercosur and is excluded from the trade arrangement.