After clearing major political hurdles after more than two decades, the mammoth trade deal now faces further delay pending a judicial verdict.
The European Parliament voted on Wednesday to refer the EU-Mercosur trade agreement to the EU Court of Justice, a move that significantly delays the deal and could potentially derail its final approval.
As expected, the vote was tight, with 334 MEPs in favour of the referral, 324 against, and 11 abstaining.
The European Commission could still provisionally apply the deal, provided the move were endorsed by member states.
The agreement was signed on 17 January, and is set to create a free trade area of over 700 million people. It is controversial across Europe, and several countries like France and Poland have steadfastly opposed it.
The agreement's advocates consider it a major opportunity for European industries and a way to bolster the EU’s geostrategic position, especially at a time of constant friction with the United States. But it has also drawn outrage from farmers worried about the implications of cheap and lower-standard food from South American countries flooding into the European market.
Mass protests were held the day before the vote in Strasbourg, with thousands of farmers driving tractors surrounding the European Parliament and clashing with police.
What happens now
The Court will now consider whether the trade deal is compatible with EU treaties.
The MEPs who proposed the referral consider that splitting the deal to leave the trade part for the approval of the EU Council and the EU Parliament only was a tactic by the European Commission to “prevent [member states] national parliaments from having their say on the agreement”, and could be considered unlawful by the judges.
The resolution calling to challenge the agreement also challenges the legality of the so-called “rebalancing mechanism” introduced in the agreement, which would allow Mercosur countries to take compensatory measures if future EU laws reduce their exports to Europe.
The referral adopted on Wednesday suspends the approval procedure in the European Parliament, which was set for a final vote in the coming months. The EU top court’s ruling could take more than a year to be issued, and in the interim, the deal's approval will be frozen.
The European Commission can still go ahead with a provisional application of the deal while the Parliament’s appeal is being examined, despite committing in several emails sent to MEPs and seen by Euronews that it would refrain from doing so.
This is technically possible, as a Commission spokesperson made clear, but risks straining relations between the EU institutions.
After the vote in the Parliament, a European Commission spokesperson said that the Commission "regretted the decision" and "would seek to convince lawmakers about the geostrategic importance of this trade deal".
Asked about a provisional application of the agreement, the spokesperson said the matter would be discussed during Thursday's extraordinary summit of EU leaders before any further steps can be decided.
Parliament split
The vote also showed how the Parliament is split in half, with a margin of only 10 votes, and several political groups are divided over the contentious deal with Latin American countries.
Renew Europe, the Greens/EFA, and the Left promoted the referral and are generally against the trade deal, albeit with some exceptions.
Far-right group Patriots for Europe was also in favour of the referral, and it did not refrain from voting for an initiative coming from the leftist side of the Parliament, as announced by the group's President, Jordan Bardella.
The European People’s Party and the Socialists and Democrats, the Parliament's largest groups, defended the trade deal and voted against the referral to court. But in both political families, some MEPs challenged the group's line.
The European Conservatives and Reformists allowed their lawmakers a free vote, and a split emerged: Polish and French MEPs voted in favour of referral, while Italian, Czech, Belgian, and Baltic MEPs voted against.