Brussels, Belgium. The European Union will proceed with provisional application of its free trade agreement with the South American bloc Mercosur to secure a first-mover advantage, European Commission President Ursula von der Leyen said on Friday.
Provisional application despite legal challenge
The European Union normally waits for approval of its free trade agreements by EU governments and the European Parliament. However, EU lawmakers voted last month to challenge the agreement in the bloc’s top court, a move that could delay its full implementation by up to two years.
Approval by the EU assembly will still ultimately be required for the trade pact, but the EU and Mercosur can begin reducing tariffs and applying other trade aspects of the agreement before then.
Deal details and potential impact
The agreement with Argentina, Brazil, Paraguay and Uruguay was concluded in January after about 25 years of negotiations. It could remove around €4 billion ($4.7 billion) of duties on EU goods exports, making it the bloc’s biggest ever free trade agreement in terms of potential tariff reductions.
Support and opposition within the EU
Germany and other supporters, including Spain, say the deal is essential to offset business lost due to US tariffs and to reduce reliance on China for critical minerals. Opponents led by France, the EU’s largest agricultural producer, say the deal will sharply increase imports of cheap beef, sugar and poultry, undercutting domestic farmers who have staged repeated protests.
Ratifications and Commission statement
The Commission’s move follows Argentina and Uruguay ratifying the agreement on Thursday, with Brazil and Paraguay expected to follow soon. Von der Leyen said the deal offers Europe a first-mover advantage and that this advantage had to materialise.
“I’ve said before, when they are ready, we are ready,” von der Leyen said in a short statement. “On that basis, the Commission will now proceed with provisional application.”
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