EU-Mercosur deal, six months on: winners, losers and the question mark over Europe’s top court

Six months after it began to apply provisionally, the trade agreement between the European Union and Mercosur, made up of Argentina, Brazil, Paraguay and Uruguay, combines projected benefits for both blocs, opposition from part of Europe’s farming sector and a legal question mark: the opinion of the EU Court of Justice on its legality, which could take until early 2028.

The interim trade agreement, signed in January, has applied since May 1 and covers trade and investment liberalisation. Mercosur will gradually eliminate tariffs on 91% of imports from the EU and the EU on 92% of those from Mercosur. The European Commission specified that it applies to those South American countries that completed their ratification. The broader, political Association Agreement must be ratified by all 27 member states. On January 21, the European Parliament voted 334 to 324 to ask the court to review the deal. The Commission then said those doubts were unjustified, and provisional application continues in the meantime.

Supporters highlight tariff savings of about €4 billion and a market of more than 700 million consumers. BBVA Research estimates that bilateral trade will grow by 40% by the end of the 16-year implementation period. For Mercosur, the estimates cited by the newspaper point to a boost of up to half a percentage point of GDP in Argentina and one and a half in Brazil.

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