EU parliament refers Mercosur free trade deal to bloc’s top court

The top court of the bloc will now be tasked with handling the controversial free trade agreement signed by the European Union with four South American nations, revealing uncertainty over the agreement’s future after 25 years of negotiations.

In a close election on Wednesday, Strasbourg residents voted 334 to 324 in favor of asking the Court of Justice of the European Union to review the bloc’s strategy.

After 25 years of negotiations, the EU finally signed its largest trade agreement ever on Saturday.

It lowers tariffs on more than 90% of bilateral trade, favoring European exports of cars, wine, and cheese, and eases the entry of South American beef, poultry, sugar, rice, honey, and soya beans into Europe.

US tariffs are being offset.

Germany and Spain, among others, argued that the agreement was necessary to offset trade losses caused by US tariffs and to reduce China’s dependence by securing access to crucial minerals.

In a time when US tariffs and rising Chinese exports were in the air, its signing was hailed as a significant geopolitical victory for the EU, strengthening the bloc’s foothold in a resource-rich region that Washington and Beijing are increasingly disputing.

Farmers’ groups, including those in France, Poland, and Poland, claimed the agreement would significantly increase imports of cheap beef, sugar, and poultry, undermining domestic farmers who have launched counterprotests in recent weeks.

The EU executive, which includes Argentina, Brazil, Paraguay, and Uruguay, expressed regret over the European Parliament’s decision to halt the deal with the South American trade bloc known as Mercosur (Mercado Comun del Sur).

The commission has already addressed those questions and issues in a very thorough way, according to our analysis, which the parliament’s motion does not support.

The EU Court of Justice must now decide whether its provisions restrict the EU’s authority to create environmental and consumer health policies. The court’s decision could lead to the modification of the agreement, which typically takes two years to deliver.

The European Parliament would still have the right to revoke the pact at any time while the ruling and parliamentary approval are still in place.