After nearly 25 years of negotiations and its approval by a narrow majority of EU member states, the EU-Mercosur trade agreement has hit a new hurdle. On Wednesday, the European Parliament decided by a narrow majority to refer the draft agreement to the EU Court of Justice to examine its legal basis. Mercosur’s case was difficult from the start. Approval of the agreement required a qualified majority of at least 15 member states representing 65% of the EU population, making the stance of countries such as Italy, France and Poland crucial. Although the majority was reached on 9 January, many MEPs had warned that they would take the matter to court, which has now materialised.
The agreement, which has become a "red flag" for European farmers and ranchers - with protests from Brussels and Paris to the Greek provinces - aims to create a vast free trade area. It would allow the EU to increase exports of drinks, cars and machinery to the Mercosur countries (Brazil, Argentina, Uruguay and Paraguay), a market of around 780 million consumers.
On the other hand, the agreement would facilitate access to the European market for products such as beef, sugar, rice, honey and soy from Latin America. This prospect worries European farmers, who say they cannot compete with the lower production costs in these countries.
Due to the different structure of their national economies, countries with strong agricultural production such as France, Poland and Ireland are among the main opponents of the agreement. In contrast, Germany, Spain and the Scandinavian countries support it, seeing new export opportunities, especially at a time of increasing Chinese competition and trade tensions with the US.
Divided Eurogroups
The split was clearly reflected in the European Parliament's plenary session. In Wednesday's vote, 334 MEPs (50%) voted in favour of referring the agreement to the Court of Justice, 324 (48%) against, with 11 abstaining. A total of 669 MEPs voted, with 50 absent. From the European People's Party (EPP), the largest eurogroup that also includes right-wing MEPs from various countries, 181 out of 188 MEPs took part in the vote, with the majority voting against sending the agreement to the court. The decision by the EU Court of Justice is expected to be decisive for the fate of one of the most controversial trade agreements in recent years.
