EU set to provisionally apply Mercosur trade deal from March despite court referral

EUROPE – The European Union is preparing to provisionally apply its long awaited trade agreement with the Mercosur bloc as early as March, according to an EU diplomat, even as the deal faces a legal referral that could delay full ratification for years.

This approach follows a decision by EU lawmakers to send the agreement to the European Court of Justice, a move that could suspend final approval for up to two years and has exposed deep divisions among member states over trade, agriculture and institutional authority.

An EU diplomat told Reuters that the agreement would enter provisional application once the first Mercosur country completes ratification, adding that Paraguay is expected to do so in March, opening the door for partial enforcement of the pact.

The trade agreement covers Brazil, Argentina, Paraguay and Uruguay and was signed over the weekend after more than two decades of negotiations, making it the largest trade deal the European Union has ever concluded.

Economic stakes and political backing

Germany has emerged as one of the strongest supporters of the deal, with its government and export focused industries arguing that delays could worsen economic pressure already caused by United States tariffs and rising dependence on Chinese markets.

DHL chief executive Tobias Meyer said the referral to the court had shaken business confidence, warning that postponement could damage jobs and economic prospects, while adding that provisional implementation during legal review would still offer companies a degree of certainty.

German Chancellor Friedrich Merz echoed that view at the World Economic Forum in Davos, saying he regretted the European Parliament’s decision and insisting the agreement remained essential for economic growth despite political resistance.

French opposition hardens

France has led opposition to the pact, arguing that increased imports of South American beef, sugar and poultry would harm domestic farmers, a concern that has driven large scale protests including tractor blockades in Paris and other cities.

Franck Sander, head of France’s CGB sugar beet producers lobby, rejected the idea of provisional application outright, calling it unacceptable and accusing EU institutions of sidelining democratic processes.

The French government reinforced that position, with spokesperson Maud Bregeon saying that forcing provisional implementation after the Strasbourg vote would amount to a democratic violation, a claim made before the EU diplomat’s comments became public.

While the European Commission has said it will consult member states and lawmakers before taking further steps, EU leaders meeting in Brussels later on Thursday are also expected to discuss broader transatlantic tensions linked to recent demands by US President Donald Trump over Greenland.

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