The EU executive completed the final steps to begin provisional enforcement of the controversial Mercosur trade agreement, with tariff reductions on products scheduled to start on 1 May despite an ongoing legal challenge at the EU Court of Justice.
On Monday, the European Commission concluded the necessary measures to apply the Mercosur trade deal provisionally from 1 May, including Argentina, Brazil, Paraguay, and Uruguay.
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This procedure enables the deal to enter into force despite the judicial review initiated by the European Parliament following the decisive vote on 21 January that paused ratification.
“The main objective is now to transform the EU-Mercosur agreement into tangible results, providing EU exporters the platform necessary to capture new opportunities in trade, economic growth, and employment,” stated EU Trade Commissioner Maroš Šefčovič, adding: “Provisional implementation will enable us to start fulfilling that commitment.”
The agreement facilitates freer trade between the EU and Mercosur states, establishing a free-trade zone encompassing over 700 million inhabitants.
The Commission approved the agreement and gained support from EU member countries despite significant objections from EU farmers concerned about unfair competition from Mercosur imports.
However, within the European Parliament, opponents achieved a majority vote to refer the deal to the Court of Justice of the European Union to evaluate its legality.
Encouraged by proponents such as Germany and Spain, which seek accelerated market access amid escalating geoeconomic tensions, the Commission chose provisional application.
In order to proceed, ratification and notification of the agreement by at least one Mercosur nation were required before provisional execution could begin with that nation. Argentina, Brazil, and Uruguay have completed this process, while Paraguay ratified the deal last Tuesday and “is expected to submit its notification shortly,” according to the Commission.
On Monday, the Commission sent a “verbal note” to Paraguay, acknowledged as the legal custodian of Mercosur treaties, marking the final procedural action.
“Provisional application guarantees tariff removal on specific products starting from day one, instituting predictable regulations for trade and investment,” the Commission explained.
“It will strengthen more resilient and dependable supply chains, particularly essential for the steady supply of Critical Raw Materials.”