EU – Mercosur: 25 years of fight, one year of judicial chaos
After 25 years of diplomatic service, the European Union and Mercosur (Brazil, Argentina, Paraguay, Uruguay) initialled a free trade agreement in Asunción, drawing up a trade bloc of 780 million inhabitants and 25 % of world GDP.
Ursula von der Leyen and Paraguayan President Santiago Peña finalized a controversial trade agreement between the European Union and Mercosur, despite strong opposition from European farmers. This pact provides for the abolition of 91% of customs duties on European products exported to Mercosur and 92% in the other direction. However, an appeal to the EU Court of Justice (CJEU) could suspend the process for 12 to 18 months.
A live green light: On 9 January, a qualified majority in the EU Council provisionally approved the agreement, despite the veto of France, Italy and Ireland. On the Mercosur side, Brazil and Uruguay have already ratified their share, while Argentina is slow to decide in Parliament.
France on the front line to defend its agriculture : in Brussels, France leads the sling, fearing for its agricultural sector. Quotas limited to 99 000 tonnes of beef (with only 7.5% of customs duties) are not sufficient to reassure against less stringent environmental and health standards in South America. In order to ease tensions, the European Commission has pledged EUR 45 billion in advance payments for the CAP in 2028, but Paris considers this to be an envelope. « insufficient ».
A judicial brake The European Parliament seized the ECJ on 21 January (334 votes to 324) to verify compliance with the European Treaties. This procedure suspends the provisional application of the text. If the Court's opinion is favourable (expected mid-2027), the 27 national parliaments will have to ratify this « Joint Agreement ». Otherwise, there will be a need to renegotiate, particularly on agricultural and environmental issues.
Germany is pushing for industrial advantages (cars, machinery), while France and Italy demand stronger safeguards against agri-food imports. For France, the agreement could boost its annual exports (wines, pharmaceuticals, luxury) of EUR 5.56 billion, with a potential gain of EUR 4 billion thanks to the abolition of customs duties. But the agri-food sector remains alive.
A strategic challenge to global trade tensions : in a context marked by « Trump tariffs » and China's rise in power, this agreement aims to secure Atlantic supply chains. It remains to be seen whether the EU will succeed in reconciling economic ambitions with the protection of its agricultural model.