EU-Mercosur Trade Pact Faces Legal Hurdles Amid Provisional Implementation

The EU's trade deal with Mercosur countries is set for provisional application amidst potential legal delays. An EU diplomat suggests the pact, involving Brazil, Argentina, Paraguay, and Uruguay, will start with Paraguay in March, facing criticism and support from various economic stakeholders.

The European Union's landmark free trade agreement with South American nations is poised for provisional implementation, as early as March, despite potential legal challenges. According to an EU diplomat, the EU-Mercosur deal awaits ratification from the member countries, with Paraguay likely to be the first to do so in March.

On Wednesday, the European Parliament referred the controversial trade agreement involving Brazil, Argentina, Paraguay, and Uruguay to the European Court of Justice, which could delay its full enforcement for up to two years. This setback has frustrated key European businesses and Chancellor Friedrich Merz, a major proponent of the deal.

During the World Economic Forum in Davos, Merz expressed discontent over the Parliament's decision, emphasizing the economic growth potential the deal holds for Europe. While supporters highlight its benefits in reducing reliance on China and offsetting U.S. tariffs, critics, especially from France, warn it might harm domestic agricultural sectors by increasing imports of cheap products.

(With inputs from agencies.)