The European Parliament has made significant strides by voting to refer the much-anticipated EU-Mercosur trade agreement to the bloc’s highest court. This decision, which could postpone a definitive ruling on this trade pact for at least one year, underscores the ongoing complexities in the food and beverage industry.
In a tightly contested vote, 334 Members of the European Parliament (MEPs) supported a resolution calling for a legal review by the European Court of Justice (ECJ) regarding both the EU-Mercosur Partnership Agreement (EMPA) and the Interim Trade Agreement (ITA). Conversely, 324 MEPs opposed the move, with 11 choosing to abstain.
The anticipated review by the ECJ is expected to exceed 12 months, which will delay the ratification timeline of this agreement with the Mercosur bloc, comprising Brazil, Argentina, Paraguay, and Uruguay. This recent parliamentary action follows the EU governments’ qualified majority decision on January 9, favoring the agreement, despite vocal resistance from European agricultural groups who consider it “fundamentally unbalanced” and “flawed.”
The deal, signed on January 17 in Paraguay, was celebrated by European Commission President Ursula von der Leyen, who remarked on the creation of “the largest free trade zone in the world.” However, the European Parliament has signaled that it will withhold any final vote until the Luxembourg-based judges have delivered their ruling.
In the resolution adopted on January 21, members reiterated their commitment to scrutinizing the deal while awaiting the court’s opinion. They stated, “Only then will parliament be able to vote to grant consent (or not)” to the agreement. MEPs proceeded with this referral despite von der Leyen’s late plea urging them against such action. She articulated that the Mercosur deal is “hotly debated in this house” and emphasized its potential to benefit European companies greatly, especially in sectors including dairy, wine, and spirits.
The agreement focuses on reciprocal tariff liberalization. Under the proposal, the EU aims to gradually abolish customs duties on 92% of imports from Mercosur over ten years. In exchange, Mercosur countries would reduce tariffs on 91% of EU goods over a 15-year period, enhancing trade relations amidst evolving food and drink consumer trends.
As the second-largest trading partner for Mercosur, the EU accounted for nearly 17% of the South American bloc’s trade in 2024, with bilateral trade exceeding €111 billion ($129.7 billion). However, political reactions have varied sharply. For instance, German Chancellor Friedrich Merz criticized the Parliament’s decision to initiate court scrutiny, stating on X, “The European Parliament’s decision on the Mercosur agreement is regrettable.”
In contrast, the farm lobby Copa-Cogeca, representing EU agricultural organizations, endorsed the referral. They described the accord as “divisive,” emphasizing that European farmers are the first to suffer from geopolitical instability. They argued that “fair and balanced trade, coherent with internal policies needs to be a certainty,” particularly in uncertain times.
On the other hand, the Comité Européen des Entreprises Vins voiced concerns over the referral, predicting an 18 to 20-month delay in the ratification process. They expressed disappointment, claiming that “time is money,” especially amid escalating geopolitical and economic challenges. They further noted that the EU–Mercosur Agreement could enhance the competitiveness of European wines in international markets.
Until the ECJ issues its opinion, the agreement remains in limbo, awaiting the European Parliament’s final determination regarding its consent.
