E.U. Despite legal obstacles, moves forward with South American trade agreement
The provisional application of the agreement with Brazil, Argentina, Paraguay and Uruguay is intended to diversify Europe’s trading relationships.
Officials said on Friday that the European Union will continue to implement a significant trade agreement with four South American nations, despite the fact that lawmakers began a legal challenge that could have delayed the agreement for years. Last month, lawmakers in the European Parliament referred the deal, which is set to create one of the largest free-trade zones in the world, with more than 700 million people, to the European Court of Justice. That had the potential to delay the deal up to two years.
However, European Commission President Ursula von der Leyen stated on Friday that the Mercosur agreement with Brazil, Argentina, Paraguay, and Uruguay would be “provisionally applied.” “One of the most consequential trade agreements of the first half of this century,” she said of the agreement. In the midst of turmoil with the United States of America and China, the European Union’s two largest trading partners, officials have pushed for more diverse trading relationships.
The approval process for the European Union’s trade deal with the United States was put on hold this week by the European Parliament following the U.S. Many of President Trump’s tariffs were invalidated by the Supreme Court. Europe is also dealing with a significant increase in China’s imports, which is creating a trade imbalance that is getting worse. After nearly two decades of negotiations, the European Union and India reached a trade agreement last month.
After years of disagreement, farmers staged significant protests in some European cities in recent months, and the Mercosur agreement was also reached. A spokesperson for the European Commission, Olof Gill, stated that the move was motivated by a “geostrategic urgency” and that any further delay would risk weakening the bloc’s economic position and political influence.
He stated, “If we wait, others may overtake us.” “In the current geopolitical context, we cannot allow that to occur.” Uruguay and Argentina were the first to ratify the deal on Thursday, and so the European Union would now “proceed with provisional application,” Ms. von der Leyen said. She added that Brazil and Paraguay were anticipated to follow shortly.
Ms. von der Leyen stated that the bloc would gain a “first-mover advantage in a world of sharp competition and short horizons” if the agreement was applied in part. The agreement must still be carried out in a few steps: first, the commission must send formal notifications to the countries that have ratified the agreement, and then the agreement must enter provisional application at the latest one month later.
Before moving to apply the deal provisionally, Ms. von der Leyen stated that she had contacted heads of European member states and other lawmakers, and that the Parliament would still need to give its consent before the trade deal could be fully concluded. Some members of the European Parliament have been enraged by the commission’s decision to move forward with the deal without waiting for the legal review. As a result, the European Parliament voted narrowly to send the deal to a judicial review. Jordan Bardella, president of the far-right National Rally party in France and a member of the European Parliament, called the move an “antidemocratic power grab” in a social media post on Friday.
