Latin America waiting: What’s next for the EU-Mercosur deal?

The European Commission eyes pushing the bloc’s biggest ever trade deal ahead without the European Parliament’s okay ― for now.

Twenty-five years in the making, the EU-Mercosur deal — a sweeping trade agreement between the European Union and the Latin American countries Brazil, Argentina, Paraguay and Uruguay — has hit another roadblock, just days after being signed.

The European Parliament who has yet to formally vote on the deal, voted on Wednesday, January 21, to send parts of the agreement to the European Court of Justice (ECJ) for a legality check.

One of the initiators of the vote, Austrian Green MEP Thomas Waitz, told DW: "There are legitimate concerns, legal concerns, and it's important that the European Court of Justice checks them and gives advice on how to deal with these issues."

Parliament wants the court to check one specific mechanism that could enable Brazil, Argentina, Paraguay and Uruguay to challenge EU rules if they think these infringe on their market access.

"It's about standards of production and it's about a chilling effect on our sovereign right to legislate," says Waitz. 

As a result, the final parliamentary vote will likely be postponed until after the ECJ ruling — potentially months, if not years, away.

The decision was met with disbelief by supporters of the Mercosur deal, who are now eyeing an interim solution.

The agreement could legally be applied provisionally, without the okay from Parliament. German Chancellor Friedrich Merz floated the idea just hours after the EP vote, and some Members of Parliament voiced support as well.

The European Council has already given its green light.

"I invite the Commission to use this decision from the Council and to implement the provisional application of the Mercosur agreement," Council President Antonio Costa said after the informal Council summit on January 23.

For provisional application to begin, at least one member state would need to ratify the deal first.

That could happen as early as this week. Paraguay's president announced that his country was preparing for ratification.

Asked whether the Commission was ready for the next step, Commission President Ursula von der Leyen told reporters on Friday: "We will be ready when they are ready."

Provisional application would be a positive first step, Klemenz Kober of the German Chamber of Commerce and Industry told DW. But German businesses are hoping for more.

"If the agreement is ratified in its entirety as quickly as possible, there will be planning certainty," Kober said, adding that customs reductions and market liberalization measures would then remain in force long-term.

With provisional application increasingly likely, doubts among some EU politicians and member states remain.

In the European Council, France, Poland, Austria, Ireland and Hungary voted against Mercosur, Belgium abstained. In several of those countries, both far-right and far-left parties had rallied against Mercosur.

Large farmers' protests highlighted fears that the agreement would flood the European market with cheaper, less regulated agricultural products from Latin America, further pressuring an already struggling sector. The European Commission says it addressed these concerns by adding several safeguards to the deal.

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That is not enough, according to governments such as Poland's, which had previously vowed to refer the agreement to the European Court of Justice regardless of the outcome of the Parliament's vote.

The European Parliament's final vote on the trade pact was expected to come in May at the earliest. The European Court of Justice's case will likely delay it more.

Even if the court clears the agreement — which the Commission says it is confident it will — there is no guarantee the Parliament will ultimately vote in favor.

Europe's Latin American partners are growing impatient after 25 years of negotiations.

"If they delay this further, we are moving ahead," Paraguayan President Santiago Pena told DW ahead of last week's parliamentary vote. "We signed a free trade agreement with Singapore last year. We are now in negotiations with the United Arab Emirates. We are also advancing with Canada, with Japan, with Korea. We have plans to begin negotiations with Vietnam and Indonesia, meaning that the Mercosur countries are more than willing to integrate to the entire world."

And Pena is not alone. When the European Council postponed a decision in December 2025, Brazil's President Luiz Inacio Lula da Silva reportedly issued an ultimatum: The EU should decide now — or wait until he leaves office.

The latest dispute over Mercosur goes beyond trade policy.

At a time when Europe faces growing pressure to present a united front on the global stage, the bloc's institutions are once again struggling to align on a major decision. Some critics see the Commission's willingness to proceed while the Parliament awaits an ECJ ruling as another sign of widening rifts between EU institutions.

And as the EU wrestles with its internal divisions, its Latin American partners may already be looking elsewhere for their next trade alliances.