The European Parliament approved with a razor-thin vote (334 votes in favour, 324 against and 11 abstentions) the request to bring the free trade agreement with Mercosur to the Court of Justice of the European Union.
The deputies, in order to block the entry into force of the pact, ask the community judges to evaluate the compatibility with the Treaties of the Partnership Agreement and the Interim Trade Agreement signed by the President of the Commission Ursula von der Leyen with the Mercosur countries. The decision paves the way for a preventive check on the legal basis of the two texts that make up the pact, before the political and institutional process can proceed towards ratification.
The agreement was frozen
This decision theoretically blocks the entry into force, perhaps for more than a year, of this treaty which creates one of the largest free trade areas in the world between the EU, Brazil, Argentina, Paraguay and Uruguay, i.e. more than 700 million consumers. It should allow the EU to export more cars, machinery, wines and spirits to Latin America, while making it easier for South American beef, poultry, sugar, rice, honey and soya to enter Europe.
However, the Commission has the possibility to apply it provisionally if it wishes, but the European executive has not taken a decision on the matter and has for now expressed its “deep disappointment” after the Parliament’s vote.
A fervent supporter of this free trade agreement, signed on Saturday in Paraguay, German Chancellor Friedrich Merz deemed the decision of the MEPs “deplorable”. “Convinced of the legality of the agreement”, he asked for its provisional application. The French government instead welcomed Parliament’s vote, in “consistency with the position” of France, against the treaty.
The appeal
The request concerns the consistency of the agreements with the primary law of the Union, i.e. with the rules contained in the Treaties that define the competences, procedures and roles of the institutions, in this case in the conclusion of international agreements. In this type of verification, the Court does not enter into the political merit of the agreement, but evaluates whether the chosen legal approach is compatible with the architecture of the Union and with the procedures established by EU law.
The instrument used is that provided for in Article 218, paragraph 11, of the Treaty on the Functioning of the European Union. The rule allows the European Parliament, the Council, the Commission or a Member State to ask the CJEU for an opinion on the compatibility of an “envisaged” international agreement with the Treaties. The objective is to prevent the Union from binding itself to a text which, at a later stage, could be the subject of disputes as to its legitimacy.
The focus on the double text
In the approved resolution, Parliament “expresses its concern that the split of the EU-Mercosur agreement into the EU-Mercosur partnership agreement and the interim trade agreement may be incompatible with Article 218, paragraphs 2 and 4, TFEU”, i.e. with the rules that establish how these pacts are stipulated and approved.
To reach the agreement with Mercosur it actually took 25 years of negotiations. A first preliminary agreement was reached (and then set aside) in 2019, then the first agreement on the free trade agreement was reached in December 2024 with a flash negotiation led by von der Leyen in Montevideo.
In order not to waste further time, the Commission therefore used a technical trick: it divided the EU-Mercosur agreement into two pieces, one political and one commercial, to allow at least the commercial part to pass through an easier path and with fewer obstacles. The latter, unlike other trade agreements such as the Ceta stipulated with Canada, will not have to pass through national parliaments. In practice, ratification in the 27 member states is not needed: the green light from the governments in the EU Council and a vote from the European Parliament are enough.
And it is precisely this that gets on the opponents’ nerves: according to them, dividing the agreement into two pieces serves to keep at least the commercial pillar going while avoiding the risk of a country blocking it at a national level. This ploy, the European Chamber writes in its resolution, “circumvents the right of national parliaments to ratify the interim agreement”. The MEPs also argue that “the national parliaments of various member states have already expressed their opposition to ratification” with dedicated resolutions.
The “rebalancing mechanism”
Another of the points contested by Parliament is the so-called “rebalancing mechanism”, a clause that would allow a Mercosur country to request compensation if new European rules (for example on the environment, pesticides, food safety) were to be accused of significantly reducing the commercial advantages guaranteed by the agreement. For opponents, the risk is that the instrument will turn into a political lever against future EU measures on the environment, pesticides or food safety, discouraging Brussels from raising standards to avoid litigation and compensation claims.
According to the French liberal Pascal Canfin, it is a “time bomb” that would risk depriving the EU of its “sovereignty”, especially if Brussels strengthens its environmental regulations. The resolution approved by the House denounces that the mechanism “could be used by Mercosur countries to put pressure on the EU to refrain from adopting or applying legislation and other measures relating to climate and environmental protection, food safety or the ban of certain pesticides”.
And for this reason, Parliament “expresses concern that the rebalancing mechanism envisaged by the EU-Mercosur agreement may be incompatible” with various articles of the Treaties and of the Charter of Fundamental Rights and “may threaten the EU’s ability to maintain the autonomy of the legal system”.
The ball passes to the Court
A positive opinion from the Court of Justice would strengthen the legal solidity of the approach adopted and allow the institutions to continue with the process according to the established rules, reducing the exposure to subsequent disputes on the legal basis or procedures followed. The possibility of a negative opinion would have more radical consequences.
Article 218(11) establishes that, in case of incompatibility detected by the Court, the agreement cannot enter into force except after a modification of the text or, theoretically, after a revision of the Treaties. In practice, this would mean having to review the legal framework of the two instruments before being able to restart the ratification process. The text could then have to pass, like Ceta, to the 27 parliaments of the member countries, increasing the possibility that one of these could reject it.
