The Mercosur agreement is stuck – The Commission is considering a bold move past Parliament

On Wednesday, the EU Parliament sent the Mercosur agreement, which creates the world’s largest free trade area, to be examined by the EU Court.

The decision can delay the approval of the contract for up to two years, because the court investigation takes time. The EU Parliament also cannot vote on the actual approval of the agreement until the court has given its opinion.

Wednesday’s decision of the EU Parliament was made with a majority of only 10 votes. According to the opponents, the agreement is not fully compatible with the EU treaties, and the EU Commission overstepped its authority when negotiating with four South American countries (Argentina, Brazil, Paraguay and Uruguay).

There were those who voted for postponement in almost all parliamentary groups. Among the Finns, MEPs from the Greens, the Left Alliance and Basic Finns voted in favor of sending it to the court, while the MEPs from the coalition, the center, the SDP and the RKP were against it.

Can the application still be started?

Despite the Parliament’s decision, the Mercosur Agreement may be able to be applied temporarily until the court’s decision.

The EU Commission and the majority of the member states have hoped that the agreement would enter into force as soon as possible. It would show that the EU is capable of functioning and able to promote global free trade amid the current instability.

The decisive thing is whether the Commission decides together with the member states that the application of the agreement can be started despite the Parliament’s postponement.

Chancellor of Germany Friedrich Merz already demanded the EU Commission to start applying the agreement despite the Parliament’s decision. On the other hand, France, which opposes the agreement, demands that the parliamentary vote must be respected.

In practice, the Commission could put the trade dimension of the agreement into effect already on the basis of the preliminary approval of the agreement, because the majority of EU member states have already approved the agreement.

The question now is whether the Commission dares to take the risk if there is a contradiction in the legal basis of the agreement.

The Commission assures that there is no such conflict. According to the Commission, the Parliament’s concerns about the compatibility of the trade agreement with the EU treaties are unfounded.

Another question to consider is whether the possible implementation of the trade dimension of the agreement will become too fierce a struggle for prestige between the Parliament and the Commission.

The Commission said on Wednesday that it plans to hold discussions with the Council and members of the European Parliament before deciding on the next steps.

In the event that the EU court judges that the Commission has acted incorrectly and violated the EU’s basic treaties, after that the Mercosur agreement should be renegotiated in certain parts with the Mercosur countries before the agreement can be finally approved.