EU’s Historic Mercosur Trade Deal Nears Early Launch—Despite Court Challenge and Political Backlash

After 25 years of negotiations, Europe’s biggest trade agreement ever is finally moving—just not in the way Brussels originally planned.

The European Union’s landmark free trade deal with Mercosur—covering Brazil, Argentina, Paraguay, and Uruguay—is now expected to be applied provisionally as early as March, according to an EU diplomat speaking to Reuters. The surprise twist comes even as the agreement faces a potentially long legal challenge at the EU’s highest court.

For businesses and policymakers alike, the message is mixed: legal uncertainty ahead, but economic momentum is building fast.

Just days after the deal was signed, EU lawmakers threw a curveball. On Wednesday, the European Parliament referred the agreement to the European Court of Justice, a move that could delay full ratification by up to two years.

The referral reflects deep political divisions inside the EU, particularly around agriculture, environmental standards, and domestic economic protections.

Yet despite the legal cloud, Brussels appears determined to push forward.

According to EU officials, the deal doesn’t need to wait for every country to ratify it before delivering impact.

“The EU–Mercosur agreement shall be applied provisionally once the first Mercosur country has ratified it,” an EU diplomat said—adding that Paraguay is likely to do so in March.

That would allow large parts of the agreement to take effect quickly, giving European exporters early access to South American markets while legal debates continue in the background.

Few leaders have been more vocal in support of the deal than German Chancellor Friedrich Merz, who has made it a cornerstone of Europe’s growth strategy.

Speaking at the World Economic Forum in Davos, Merz openly criticized the European Parliament’s decision, calling it an unnecessary obstacle.

“But rest assured: we will not be stopped,” he told delegates. “The Mercosur deal is fair and balanced. There is no alternative if we want higher growth in Europe.”

German businesses, particularly manufacturers and exporters, have echoed that frustration, warning that delays could cost Europe valuable ground in global trade.

Supporters argue the timing couldn’t be more critical.

With U.S. tariffs reshaping global trade flows and Europe seeking to reduce its dependence on China, the Mercosur agreement offers access to a massive and fast-growing market of over 260 million people.

The deal promises reduced tariffs, easier market access, and stronger trade ties at a moment when Europe is under pressure to diversify its economic partnerships.

Not everyone is convinced.

France has emerged as the leading critic, arguing the agreement will flood European markets with cheap beef, sugar, and poultry, undercutting local farmers and threatening rural livelihoods.

Environmental groups have also raised concerns about deforestation and agricultural standards in South America—issues that remain politically sensitive across the EU.

The EU–Mercosur agreement now stands at a crossroads: politically contested, legally challenged, yet economically urgent.

If provisional application begins in March, the deal could start reshaping transatlantic trade long before Europe’s judges deliver their verdict. For Brussels, it’s a calculated risk—betting that economic gains will outweigh political resistance.

One thing is clear: after 25 years of waiting, Europe is no longer willing to hit the pause button.