A 2,801-page treaty across thirty chapters and spanning decades of negotiations leaves Mercosur producers requiring only lip service to environmental requirements fully applied to European producers.
On 17 January 2026, in the marble hall of the Banco Central del Paraguay in Asunción, the presidents of Argentina, Brazil, Paraguay and Uruguay sat alongside Ursula von der Leyen and António Costa to sign a document that two generations of European and South American diplomats had failed to deliver. The Partnership Agreement between the European Union and Mercosur, negotiated since June 1999, derailed twice, rewritten twice more, is the largest free trade area in the world by population, covering 720 million people and a combined GDP of around twenty-two trillion dollars. Published in the Official Journal on 27 February 2026 as Agreement 2026/186, the consolidated text runs to 2,801 pages across thirty chapters and dozens of annexes covering tariff schedules, geographical indications, sanitary measures and origin rules in granular detail.
Four days after the signing, the European Parliament voted by 334 to 324 to refer the Agreement to the Court of Justice of the European Union, suspending the consent procedure pending a Treaty-compatibility opinion that historically takes between sixteen and twenty-four months. On 9 January 2026 the Council had cleared signature by 21 to 5 with one abstention; France, Poland, Ireland, Austria and Hungary voted against, Belgium abstained. On 27 February, after Argentine and Uruguayan ratification, the Commission announced the trade pillar would enter provisional application on 1 May 2026.
The EU and its Member States are now bound to a treaty that the elected European Parliament has refused to bless, that one of the three largest Member States actively opposes, and whose enforcement teeth on environmental commitments were deliberately removed at Mercosur’s insistence. This is the story of what was actually agreed, who got what, and why a deal pursued for twenty-six years arrived as a constitutional dispute rather than a celebration.
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A Twenty-Six-Year Negotiation
Negotiations launched at the EU-Latin America summit in Rio de Janeiro on 28 June 1999, under the legal architecture of the 1995 Interregional Framework Cooperation Agreement. The original ambition was to create a free trade area in conformity with GATT 1994 and WTO rules, framed within a wider political and cooperation pillar. The deal was supposed to be wrapped within five years.
It took twenty-six. Three structural obstacles blocked it almost immediately and never fully went away: the European Common Agricultural Policy, the Mercosur common external tariff on industrial goods, and the political volatility of the four South American partners. Negotiations went into deep freeze in 2004, partially revived in 2010, then collapsed again over agricultural concessions. By the time Brazil’s Foreign Minister and the Commission Trade Commissioner began the third serious push in 2016, the technical issues had multiplied: digital trade had become a chapter that did not exist in 1999, food-safety rules had tightened on the EU side, and Mercosur internal customs union frictions, particularly between Argentina and Brazil, had complicated tariff offers.
A first agreement in principle was reached on 28 June 2019, on the margins of the G20 Osaka summit, although it died in slow motion. The Bolsonaro government’s dismantling of Brazilian environmental enforcement, the August 2019 Amazon fires, the hardening of EU climate ambition under the Green Deal, and the 2020 pandemic combined to make ratification politically impossible. The Walloon Parliament in Belgium voted unanimously, 70 to nil, against the 2019 text in February 2020. The Dutch House of Representatives passed a non-binding rejection in June 2020. France, Ireland, Austria and Luxembourg added themselves to the opposition, and, to make things worse, Angela Merkel, the deal’s most powerful supporter in 2019, publicly questioned its viability by August 2020.
The relaunch came with Lula’s return to the Plácio do Planalto in January 2023. The Commission proposed a Joint Instrument in March 2023 to clarify and strengthen the Trade and Sustainable Development chapter, effectively a parallel side text addressing climate, deforestation and labour commitments without reopening the trade tariff schedules. Mercosur’s September 2023 counter-proposal rejected the possibility of trade sanctions for sustainability violations, a redline its negotiators have held to the present day. The deal nearly closed at the December 2023 Mercosur summit but was blocked by outgoing Argentine President Alberto Fernández and renewed French opposition. Negotiations dragged through 2024, with the political agreement being finally announced on 6 December 2024 at the LXV Mercosur summit in Montevideo, with Lula, Argentina’s Javier Milei (now in favour where Fernández had blocked), Paraguay’s Santiago Peña and Uruguay’s Luis Lacalle Pou alongside von der Leyen on the family-photo step. The same evening, Macron called it “unacceptable.”
Two Parallel Treaties
The Commission’s legal trick, and the Parliament’s constitutional grievance, is that what was negotiated as a single agreement has been split into two parallel legal instruments. The EU-Mercosur Partnership Agreement (EMPA) covers the full text, including institutional framework, political dialogue, cooperation, and the trade pillar. As a mixed agreement covering competences shared with Member States, the EMPA requires unanimous ratification by all twenty-seven national parliaments before it can fully enter into force. The Interim Trade Agreement (iTA) carries only the trade and trade-related chapters, where the EU has exclusive competence under Article 207 TFEU. The iTA can therefore enter force after Council approval and European Parliament consent alone, without any national parliament voting on it. Once the EMPA is fully ratified, the iTA expires and is replaced.
The architecture follows the EU-Singapore and EU-Vietnam precedent set after the Court’s 2017 Opinion 2/15, but its application to Mercosur is unusually consequential. Of the agreement’s thirty chapters, twenty-two sit in the trade pillar and pass through the iTA, including all the politically charged content: tariff schedules, sensitive-product quotas, sanitary measures, intellectual property and the trade and sustainable development commitments. The political dialogue, justice and security cooperation, and broader strategic partnership provisions sit in the EMPA and require the slower mixed-agreement track.
The substantive scope of what has been agreed is staggering, as Chapter 10 on Trade in Goods establishes the free trade area for goods, Chapter 11 sets the rules of origin that determine when a product is “from” a Party, Chapter 12 governs customs facilitation, Chapter 13 technical barriers to trade; Chapter 14 sanitary and phytosanitary measures (determining whether Mercosur beef can enter the Common Market at all regardless of any tariff arrangement). Chapter 18 covers services and establishment, the second-largest commercial value chain after goods, Chapter 21 protects 357 European geographical indications including Prosciutto di Parma, Champagne, Manchego, Roquefort and Fromage de Herve, the Belgian cheese that became a recurring symbol in the negotiations. Chapter 26, the Trade and Sustainable Development chapter, embeds Paris Agreement commitments and ILO core labour standards but, as we will see, sits outside the general dispute settlement system.
Around all of this, the EMPA wraps a strategic partnership architecture, with a Joint Council at ministerial level, a Joint Committee at senior official level, a Joint Parliamentary Committee linking the European Parliament to the Mercosur Parliament, Domestic Advisory Groups for civil society on each side, and a Civil Society Forum that meets in parallel with the Joint Committee. Article 5 of the EMPA designates respect for democratic principles and human rights as an essential element of the Agreement, the standard EU formulation that allows partial or full suspension if essential elements are breached, a clause that has been triggered for instance against Belarus or against Niger after the 2023 coup.
The Trade Pillar: What 91% Means
The headline numbers that have appeared in every press release since December 2024, 91% of EU exports liberalised by Mercosur, 92% of Mercosur exports liberalised by the EU, are accurate but radically incomplete. Both percentages refer to tariff lines, not trade value, and both apply only at the end of transitional periods running up to fifteen years for most goods, eighteen years for hybrid and electric vehicles, twenty-five years for hydrogen-fuelled vehicles, and thirty years for cars powered by other emerging technologies.
EU exports to Mercosur in 2024 were worth €55.2 billion; imports were €56.0 billion; the total €111.2 billion makes Mercosur the EU’s tenth-largest goods-trade partner and the EU Mercosur’s second-largest, accounting for roughly 17% of the South American bloc’s total trade. Brazil alone accounts for over 80% of that flow, EU-Brazil trade reached €89.5 billion in 2024, against €16.4 billion for Argentina, with Paraguay and Uruguay together below €6 billion. The EU is also Mercosur’s largest foreign investor with a stock of around €390 billion in 2023, more than the United States and China combined.
The structural pattern of that trade is what makes the deal politically combustible, as EU exports to Mercosur are 86.6% manufactured goods, with the largest export categories being pharmaceuticals (€6.8 billion in 2024), industrial machinery (€5.4 billion), road vehicles (€4.8 billion), specialised machinery (€3.4 billion) and electrical equipment (€3.0 billion). EU imports from Mercosur are 81.3% primary products: petroleum and related materials (€12.1 billion), animal feeding stuff dominated by soy (€7.1 billion), coffee, tea and cocoa (€5.9 billion), iron ore (€4.2 billion) and meat (€3.8 billion). The shorthand ‘cars for cows’ that has dogged the deal since 2019 is technically inaccurate, being more like pharmaceuticals and machinery for soy and oil, but it captures the underlying asymmetry. Europe sells finished goods, while South America sells the resources to make them.
Current Mercosur tariffs on those EU manufactured exports run high. Cars and finished vehicles face up to 35%; auto parts up to 18%; machinery up to 20%; chemicals up to 18%; pharmaceuticals up to 14%; clothing and footwear up to 35%. On the agri-food side, Mercosur charges up to 28% on dairy products, 27% on wines, 25% on beverages and 20% on confectionery. The Commission estimates the cumulative annual saving for EU exporters when the tariff phase-out is complete will exceed €4 billion, with the trade-weighted effective rate on EU exports to Argentina projected to fall from 10.3% in 2024 to roughly 1%. The full economic impact, on the Commission’s own modelling and consistent with Bloomberg Economics estimates, is projected to add 0.1% to EU GDP by 2032 and 0.3-0.7% to Mercosur GDP.
The Quotas: Beef, Sugar and Ethanol
The chapter of the Agreement that has driven the political opposition is not technically a chapter at all, but Annex 10-A, the schedule of tariff commitments and tariff rate quotas (TRQs) attached to the Trade in Goods chapter. For most products the schedule is straightforward, with tariffs phasing out linearly over five, seven, ten or fifteen years from entry into force. For sensitive agricultural products (the products French farmers were driving tractors around Strasbourg about on the eve of the European Parliament’s January referral vote) the schedule replaces blanket liberalisation with capped quotas at preferential rates.
The most fought-over of those quotas is beef. The EU has agreed a 99,000-tonne TRQ for Mercosur beef at an in-quota duty of 7.5%, against Most-Favoured-Nation rates that currently run 40-45% for fresh beef and up to 62% on a compound basis for frozen out-of-quota cuts. The quota is split 55,000 tonnes fresh or chilled and 45,000 tonnes frozen, with the fresh allocation phased in over five years. In aggregate, 99,000 tonnes represents around 1.5% of EU beef production and roughly 1.6% of EU consumption. Critically, current Mercosur beef imports into the EU are already running at 206,000 tonnes per year, more than double the new quota, under existing WTO and bilateral arrangements that carry full MFN duties. The new TRQ, in practice, gives Mercosur exporters a duty saving on a portion of trade they were already conducting, rather than opening unprecedented new volume.
The pattern repeats across the other sensitive products. Poultry receives a 180,000-tonne quota phased in over five years, against 2024 imports from Mercosur of around 293,000 tonnes. Again, the quota is below current trade. Sugar receives 180,000 tonnes for Brazil, carved out of an existing WTO-bound quota and made duty-free, plus a new 10,000-tonne duty-free quota for Paraguay alone. Honey receives a 45,000-tonne duty-free quota against current imports of 24,000 tonnes; rice receives 60,000 tonnes against current 211,000-tonne imports. Only ethanol, which receives a 450,000-tonne duty-free quota for chemical-industry use plus 200,000 tonnes for fuel use against current imports of around 220,000 tonnes, opens substantial new volume, reflecting the projected expansion of EU bioplastics and biochemical industries that need ethanol as a feedstock.
On top of the TRQs, the Agreement layers two safeguard mechanisms specifically for the EU’s benefit. Chapter 16 incorporates global WTO safeguards and trade defence; Chapter 17 establishes a bilateral safeguard regime under which the EU can suspend preferential tariffs entirely if Mercosur imports cause or even threaten serious injury to EU producers. Crucially, Chapter 17 covers imports made under the TRQs themselves, with this being the first EU trade agreement where the safeguard reaches inside quota volumes. The Commission has committed in parallel legislation to trigger automatic safeguard investigations if sensitive-product import volumes rise more than 5% above the three-year average or if prices fall more than 5%. The thresholds were lowered from an originally proposed 8% after intensive Italian and French lobbying in late 2025. The Commission has also committed to a €6.3 billion agricultural reserve fund in the next Multiannual Financial Framework, plus reorientation of €45 billion from existing flexibility instruments toward agriculture and rural development, which is the package that ultimately swung Italy from opposition to support and broke the blocking minority.
EU Wins
Where Mercosur exporters get marginal duty savings on volumes they already trade, EU exporters get genuine market opening on volumes that do not yet flow at scale because the existing tariff barriers make them uneconomic. The Mercosur common external tariff is one of the highest in any major trading bloc, and its elimination on most industrial goods is the EU’s commercial prize.
The automotive sector is the largest single beneficiary. Current Mercosur tariffs of 35% on finished cars and up to 18% on auto parts will phase out linearly over fifteen years for combustion vehicles, eighteen years for hybrids and electrics with a substantial first-step reduction to 25% from day one, and longer for new-technology vehicles. EU vehicle and parts exports to Mercosur were already worth around €5 billion in 2024 (Germany 42%, Italy and Spain prominent), with the sector’s lobby ACEA welcoming the deal warmly, citing both tariff phase-out and reductions in technical barriers to trade. The strategic context matters as Chinese carmakers BYD, Great Wall and Chery had invested heavily in Brazilian production over 2023-25, and EU automakers face the same loss of South American market share they have already absorbed in China unless they can match the cost position.
Wines and spirits face current Mercosur tariffs of 27% and 35% respectively, both phased to zero. EU exporters expect substantial gains in markets where premium European wine is currently a luxury good rather than a routine purchase. Cheese tariffs of 28% phase down within a duty-free quota structure that gives EU producers, particularly Italian and French, first-mover advantage over American and Australian competitors. Olive oil tariffs are eliminated. The chocolate and confectionery sector loses a 20% tariff. Pharmaceuticals, already the largest single EU export to Mercosur at €6.8 billion in 2024 despite a 14% tariff barrier, will benefit from full duty elimination over ten years.
The geographical indications schedule is among the most extensive the EU has ever negotiated, with 357 European GIs receiving protection under Mercosur law, including Prosciutto di Parma, Roquefort, Champagne, Manchego, Asiago, Feta, Tokaji, Cava and Fromage de Herve. Mercosur has reciprocally protected a smaller list of South American GIs, mostly wines and spirits including Cachacça. The protection is structurally similar to that under CETA and the EU-Japan agreement aiming to prevent misleading use and evocation, under a protection scheme that survives even when the GI is not registered as a trademark in Mercosur.
The government procurement chapter (Chapter 20) opens Mercosur public tendering to EU bidders on largely equal terms, a major commercial opening given that public procurement represents 10-15% of GDP in most Mercosur economies. The services and establishment chapter (Chapter 18) covers digital services, telecommunications, financial services, professional services and maritime transport. The intellectual property chapter (Chapter 21) extends pharmaceutical patent protection. Chapter 22 grants specific facilitation for small and medium enterprises, the more than 30,000 EU SMEs that already export to Mercosur and the broader population that the Commission projects will benefit from streamlined procedures.
Sustainability: A Flimsy Chapter
Chapter 26, the Trade and Sustainable Development chapter, is where the agreement’s political vulnerabilities become structural. On its face, the chapter is comprehensive. Article 26.4 binds both Parties to the ILO Declaration on Fundamental Principles and Rights at Work, including freedom of association, collective bargaining, the elimination of forced and child labour, and non-discrimination in employment. Article 26.5 commits Parties to multilateral environmental agreements they have ratified. Article 26.6 directly references the Paris Agreement and obliges effective implementation of the United Nations Framework Convention on Climate Change. Article 26.7 references the Convention on Biological Diversity and CITES; Article 26.8 commits Parties to combat illegal logging and promote sustainable forest management; Article 26.9 covers fisheries and the FAO Code of Conduct.
These are genuine commitments, and they go materially further than the 2019 text. They were the substance of the Joint Instrument that the Commission proposed to Mercosur in March 2023 and that became, in modified form, the present Chapter 26 plus its associated Joint Declaration. But Article 26.15(5) reads in its entirety: “No Party shall have recourse to dispute settlement under Chapter 29 for any matter arising under this Chapter”. That single clause carves out the entire sustainability chapter from the binding arbitral mechanism that polices every other commercial provision in the agreement.
What replaces general dispute settlement is the panel-of-experts mechanism in Article 26.17. A Party that believes the other has breached its sustainability commitments must first request consultations under Article 26.16. If 120 days pass without resolution, it may request a panel of three experts drawn from a list of fifteen pre-approved individuals. The panel issues an interim report within ninety days and a final report sixty days after that. The reports contain “findings of fact, the applicability of the relevant provisions and the basic rationale behind any findings and recommendations.” The complained-against Party must inform its Domestic Advisory Group within ninety days of “any actions or measures to be implemented.” The Subcommittee on Trade and Sustainable Development “monitors the follow-up”, but that is effectively where the process ends. There are no trade sanctions. There is no suspension of preferential tariffs. There is no compensation. There are, in the language of trade lawyers, no actual consequences.
This was not an oversight, as the Commission’s February 2022 review of EU TSD policy explicitly recommended sanction-based enforcement for violations of “core TSD commitments”, a regime adopted in the EU-New Zealand agreement signed in 2023, where breach of the Paris Agreement allows trade sanctions. Mercosur’s September 2023 counter-proposal to the EU rejected sanctions across the board. The Brazilian negotiators, supported throughout by Argentina and the smaller members, made non-sanctioning of the sustainability chapter a redline, which the final text has incorporated. The Joint Instrument text, which both blocs endorsed alongside the main agreement, makes additional political commitments, such as a reference to halving deforestation by 2030, alignment with the Kunming-Montreal Global Biodiversity Framework, but without altering the dispute mechanism.
A French government impact assessment commissioned in 2020 estimated the agreement could increase Amazon deforestation by 25% in the medium term through expanded agricultural-frontier production. The same assessment found that the production of one kilogram of beef in Mercosur generates approximately four times the greenhouse-gas emissions of an equivalent kilogram in Europe. In the absence of an enforceable sustainability mechanism, the Commission has fallen back on a different instrument, the EU Deforestation Regulation (EUDR), which from December 2026 will require importers to prove that soy, beef, palm oil, cocoa, coffee, rubber and timber sold in the EU come from deforestation-free supply chains. The EUDR was originally scheduled for December 2024, postponed once to December 2025 and again to end-2026, with each postponement coinciding with Mercosur diplomatic pressure on Brussels and EPP-led amendments weakening traceability. Greenpeace and the European Greens have argued that the agreement’s rebalancing mechanism, which allows compensatory measures if future EU laws reduce Mercosur exports, creates a structural chilling effect on further EU environmental legislation. The Commission denies this. It is one of the questions the Court of Justice has now been asked to consider.
Political Dialogue: A forgotten pillar
Public attention has focused almost entirely on the trade pillar, but the EMPA’s political dialogue and cooperation provisions (Chapters 4 through 8) represent the most extensive bi-regional political framework the EU has ever concluded with a third bloc. Article 4.1 establishes a regular political dialogue covering peace and security, democracy, human rights, gender equality, disarmament, counter-terrorism, organised crime, anti-corruption, regional integration and “wide political coordination at international level to support and strengthen multilateral, transparent and democratic multi-stakeholder processes for internet governance.” That last clause, buried in Article 4.1(q), is the framing for what European officials privately describe as the strategic point of the entire agreement, building a coalition of democracies committed to preserving the multilateral order against simultaneous pressure from Washington and Beijing.
Chapter 5 covers cooperation on democratic principles, human rights, the rule of law and international peace and security. The chapter binds both Parties to the International Criminal Court, the Treaty on the Non-Proliferation of Nuclear Weapons, the Arms Trade Treaty and the prevention of genocide. Article 5.2 specifically commits to the implementation of UN Security Council Resolution 1325 on women, peace and security, in the first time the EU has secured such a clause from a Latin American counterpart. Chapter 6 covers justice, freedom and security, cybercrime, drug trafficking, human trafficking, anti-money-laundering, asset recovery, migration cooperation and consular protection.
Chapter 7 governs cooperation on sustainable development, distinct from the trade pillar’s Chapter 26 and operating without the dispute-settlement carve-out. Chapter 7 covers environment, climate, energy transition, sustainable urban development, water, oceans, forests, biodiversity, disaster risk management, and the cooperation mechanisms that channel European Investment Bank lending and Global Gateway financing into Mercosur projects. Chapter 8 covers the social, economic and cultural partnership, including education, research, innovation, digital cooperation, employment, social protection, public health, gender, and culture. Together these five chapters make the EMPA a strategic-partnership instrument on the model of the EU-Japan or EU-Canada partnerships, with the trade pillar attached rather than as the central spine.
Whether any of this dialogue produces substance depends on operational follow-through that historically has not always materialised. The 1999 Rio summit launched a similar political dialogue under the Interregional Framework Cooperation Agreement; twenty-six years later, the existence of that framework is the most-cited reason the trade negotiations dragged on without political pressure to close them. The new institutional architecture, Joint Council, Joint Committee, Joint Parliamentary Committee, Civil Society Forum, will only deliver to the extent that EU and Mercosur capitals choose to invest political energy in it. The early signal is mixed, as Lula’s government has prioritised the strategic dimension; Milei has pivoted Argentina’s foreign policy toward the United States and Israel rather than the EU; Peña in Paraguay has been openly transactional, while Lacalle Pou in Uruguay has consistently pushed for deeper integration.
Vote, Veto, Court
On 9 January 2026, the Committee of Permanent Representatives meeting in Brussels approved the signature decisions for both the EMPA and the iTA by qualified majority. Twenty-one Member States voted in favour: Germany, Spain, Italy, Portugal, the Netherlands, Sweden, Denmark, Finland, Czechia, Slovakia, Slovenia, Croatia, Lithuania, Latvia, Estonia, Luxembourg, Greece, Cyprus, Malta, Romania and Bulgaria. Five voted against: France, Poland, Ireland, Austria and Hungary. Belgium abstained, reflecting an unresolved internal split between the Walloon Parliament’s standing rejection of the deal and the Flemish government’s qualified support. The qualified-majority threshold, fifteen states representing 65% of the Union’s population, was cleared comfortably.
Switch: Italy reversed earlier opposition after safeguard concessions and a €6.3bn agricultural reserve commitment
Poland — held Council Presidency H1 2025; farming-sector concerns
Ireland, Austria, Hungary — agricultural opposition
The vote was a major diplomatic defeat for Macron, who had spent much of 2024 and 2025 attempting to assemble a blocking minority of four states representing 35% of EU population. France alone holds about 15%, and Poland, Italy, Belgium and the Netherlands together with France would have crossed the threshold. Italy’s switch, secured by the €6.3 billion agricultural reserve and the lowered safeguard thresholds, was decisive. “The EU-Mercosur agreement is a deal from another era”, Macron posted on X the evening of the vote, “negotiated for too long on outdated foundations. It does not justify exposing sensitive agricultural sectors that are essential to our food sovereignty”. Italian Prime Minister Giorgia Meloni, whose December 2025 demand for additional time to negotiate concessions had nearly broken the deal, told reporters the same day: “I’ve never been ideologically opposed to Mercosur. I’m in favour of free-trade agreements. But also of regulation”.
Eight days later, on 17 January, the signing ceremony took place at the Banco Central del Paraguay. Four days after that, on 21 January, the European Parliament intervened. By 334 votes to 324 with eleven abstentions, MEPs adopted a resolution under Article 218(11) TFEU requesting the Court of Justice to provide an opinion on whether the EMPA and the iTA are compatible with the EU Treaties. The motion was tabled by 144 MEPs from the Greens, Left, Sinn Féin, Renew dissidents and a number of EPP and ECR backbenchers in agricultural constituencies. The resolution challenges three things: the Commission’s split of the agreement into two instruments, which the resolution argues was a “tactic” to deprive national parliaments of their say; the rebalancing mechanism, which allows Mercosur to take compensatory measures if future EU laws reduce its exports; and whether the agreement’s provisions restrict the EU’s ability to set environmental and consumer health policies. A second resolution requesting a parallel opinion was rejected by 402 to 225.
The Parliament’s consent procedure is now formally suspended pending the Court’s opinion. Court of Justice opinions under Article 218(11) typically take between sixteen and twenty-four months. The Parliament has indicated it will not move to its final consent vote until Luxembourg has ruled. If the Court finds the agreement incompatible with the Treaties, it cannot enter into force unless amended, and amendment requires renegotiation with Mercosur. If the Court finds the agreement compatible, the Parliament will then proceed to its final consent vote, with the agricultural-protectionist coalition still numerically capable of blocking but politically weakened by the Court’s endorsement.
The Commission has nevertheless chosen not to wait, as despite written commitments to several MEPs that it would refrain from provisional application pending the Court’s opinion, commitments documented in correspondence subsequently obtained by Euronews, von der Leyen announced on 27 February that the iTA would enter provisional application on 1 May 2026. The legal basis is the Council’s 9 January authorisation, which expressly permitted provisional application after mutual notification of completed internal procedures. Argentina ratified on 26 February; Uruguay on 27 February; Brazil on 25 February with promulgation on 17 March; Paraguay on 17 March. All four Mercosur ratifications were complete before the end of March. The Commission’s reading is that the political condition has been met. The Parliament’s reading is that doing so while the Court is still considering Treaty compatibility is, at minimum, an institutional breach of good faith.
What this means in practice is that for the period from 1 May 2026 until the ECJ rules, likely sometime in 2027 or 2028, the trade pillar of the agreement will be operating in legal twilight. EU and Mercosur traders will benefit from preferential tariffs and quota access. EU farmers will face increased competition under the Chapter 17 safeguards, while Mercosur exporters will reorganise supply chains around the new TRQs. None of this is reversible without serious commercial cost, and if the Court eventually rules the agreement incompatible with the Treaties, the EU will have to either renegotiate or terminate provisional application.
