Mercosur-EU deal delayed as European Parliament refers it to court

The European Parliament has voted to send the Mercosur-European Union trade deal to the EU’s top court to verify whether it complies with existing EU treaties.  The move effectively delays the potential implementation of the agreement, and could even lead to its derailment. The implementation of the deal was expected to happen in the last months of 2026. However, it is now suspended until the court issues its opinion, which could take 12 to 18 months.  The judges’ findings could even lead to changes to the agreement if it is found to be incompatible with EU legislation. This means implementation of the agreement could now happen in at least two years from now, supposing it will be approved by the European Parliament. The deal was signed on Saturday in Paraguay by European Commission President Ursula Von der Leyen and the Mercosur member countries, Argentina, Brazil, Paraguay and Uruguay.  It is divided into two parts: a strictly trade-only pact, designed to be implemented right after the European Commission and European Parliament approve it, and a broader one, that includes investment and environmental sections, which needs parliamentary approval from each participating country. To the top court A group of 145 European Parliament members had first proposed sending the deal to the judiciary for a legal check in November, but the proposal did not prosper at the time and the vote was delayed until now. Wednesday’s vote was tight. 334 parliament members backed the provision, 10 above those who rejected it, while 11 abstained. Among the supporters of the decision were representatives of the countries opposing the deal — Austria, France, Hungary, Ireland, and Poland — as well as left-wing and green groups. As the trade-only segment of the deal needs approval from the European Parliament to enter into effect, the number of members who voted in favor of the provision to send it to the EU court “is a good test case to have an idea of what the ratification vote will look like,” said international relations PhD Esteban Actis on X.  The parliament members who proposed the referral have said that splitting the deal in two, with only one of those parts needing EU Council and European Parliament approval, was a tactic by the European Commission to “prevent” the national parliaments of EU member states “from having their say on the agreement,” and could be considered unlawful by the court. The provision also aims for the judges to weigh in on the legality of the so-called “rebalancing mechanism” included in the agreement, which would allow Mercosur countries to take compensatory measures in case the EU introduces laws to reduce their exports to Europe. Farmers led mass protests on Wednesday outside of the European Parliament as the vote took place, signaling their disapproval of the EU-Mercosur deal.