EU leaders push to implement Mercosur trade pact

EU leaders have urged Brussels to implement a blockbuster trade deal with South American economies, overcoming a delay triggered by the European parliament.

Lawmakers voted on Tuesday to refer the Mercosur agreement to Europe’s highest court.

It could take up to two years for the European Court of Justice to give its legal opinion. However, the bloc could still implement the deal provisionally, pending a ruling.

The pact with Brazil, Argentina, Uruguay and Paraguay would remove almost all tariffs in a market of 700mn consumers, saving EU companies €4bn annually. Supporters of the deal, including German industry, argue it is necessary to counter US President Donald Trump’s tariffs and falling exports to China.

Asked if Brussels should still implement the Mercosur pact, Dick Schoof, Dutch prime minister, said: “I think they should simply continue.”

Austrian Chancellor Christian Stocker said that “as far [as] I am informed” it is “normal practice” to implement a deal provisionally.

An angry Friedrich Merz, the German chancellor, has demanded that the deal, which took 25 years to negotiate, be applied. He is expected to corral support among other EU leaders.

A senior European diplomat said: “The substance of the deal is in favour of the EU. We have said that given the state of the trade with the US and China we should diversify our sources. But then some think we should not do so with this market in Latin America.”

The opportunity to provisionally apply the deal could come by March, when Paraguay is expected to become the first country in the Mercosur bloc of countries to ratify the deal.

The two biggest groups in the European parliament have confirmed that such a move would be legal, though opponents have said it would betray democracy.

European farmers lobbied MEPs intensively before this week’s vote, saying that cheaper imports from the Mercosur bloc would destroy their livelihoods.

The European Commission insists it has robust safeguards in place if imports surge in sensitive sectors including beef, chicken and sugar.