Good morning.
It’s no secret that the European Parliament’s decision (by a narrow ten vote margin) to refer the Mercosur trade deal for a legal opinion from the EU's top court has caused a major headache for the EU Commission.
Most of the EU member states – at least, the ones who voted to approve the Mercosur deal – want it to come into force as soon as possible. They want to start reaping the economic benefits. Germany, for example, would have a new market of 300 million people to buy its cars tariff and quota-free.
And so they are piling on the pressure. German chancellor Friedrich Merz says that the agreement will be provisionally applied until MEPs get round to ratifying it.
Though the European Court of Justice (ECJ) could take months to deliver its verdict, it is hard to imagine that it will conclude that the Mercosur pact would break EU law.
The commission, which was embarrassed when member states did not green light the deal in December, forcing president Ursula von der Leyen to delay the signing ceremony by a month, would also dearly like the agreement to enter into force.
For their part, the South American states say that the pact will apply as soon as one of them ratifies it.
This could happen within a few weeks.
But Brazilian president Lula da Silva and Argentina’s Javier Milei have both voiced their frustration at the EU dragging its feet.
On Tuesday (3 February), agriculture commissioner Christophe Hansen told the Irish parliament, whose government opposed the deal, that precedents and procedures exist to apply it pre-ratification.
But it’s a fine balance. Many of the MEPs who voted for the ECJ referral do not oppose the agreement. They want the ECJ’s green light to make it easier to sell the trade pact to unconvinced constituents, particularly farmers.
Putting the deal into force anyway would make commercial sense – the commission reckons that EU firms will save more than €4bn per year – but risks hardening public opinion. That, in turn, could turn some MEPs into Mercosur nay-sayers.
“No decision has been taken,” commission spokesperson Olof Gill told reporters on Tuesday in a bid to shut down speculation.
That kept the press corps quiet, for the moment. But it’s not a position that is likely to hold.
Benjamin Fox, trade and geopolitics editor
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