Let’s rewind to December 6, 2024. A deal more than 25 years in the making, covering over 700 million people and a combined GDP approaching $22 trillion, became realized. Since then, the agreement has made notable institutional progress while encountering renewed legal and political resistance that will shape its path to implementation.

What’s happened recently?

On September 3, 2025, the European Commission formalized a two-track legal structure for the agreement. The interim Trade Agreement (iTA) covers trade and market-access provisions and requires approval only by the European Parliament and the Council. The broader EU-Mercosur Partnership Agreement (EMPA), which includes political dialogue and cooperation elements, must be ratified by all 27 EU member states. This structure was designed to deliver early economic benefits while navigating persistent political sensitivities at the national level.

That strategy appeared to gain traction on January 9, 2026, when the EU Council approved both agreements by qualified majority. Austria, France, Hungary, Ireland, and Poland voted against the package, while Belgium abstained, but opponents failed to form a blocking minority. A formal signing ceremony followed on January 17, 2026, in Asunción, Paraguay, where Commission President Ursula von der Leyen described the agreement as creating one of the world’s largest free-trade areas.

Momentum slowed days later. On January 21, the European Parliament voted narrowly to request a legal opinion from the European Court of Justice (ECJ) on whether splitting the agreement into two instruments complies with EU treaties. While this vote does not reject the agreement, it suspends Parliament’s consent process pending judicial review, introducing a potentially lengthy delay.

What are the challenges? 

Opposition within Parliament centers on two core arguments. First, critics claim that dividing the agreement circumvents national parliaments and undermines democratic oversight. Second, they challenge the agreement’s “rebalancing mechanism,” which would allow Mercosur countries to take proportionate countermeasures if future EU regulations significantly restrict agreed market access. Opponents argue this could constrain EU regulatory autonomy, particularly in environmental and agricultural policy.

The ECJ has no fixed deadline for issuing opinions, but similar reviews typically take 12 to 24 months. As a result, final parliamentary approval may not occur until late 2027 or beyond. German Chancellor Friedrich Merz has criticized the referral as regrettable and has urged the Commission to pursue provisional application to avoid further economic delay.

Political opposition remains especially strong among agricultural constituencies. French President Emmanuel Macron has repeatedly demanded stronger safeguards to protect EU farmers from import surges. Irish MEPs have condemned the agreement as sacrificing food safety and climate standards for industrial exports, particularly automobiles. Environmental organizations continue to warn that increased agricultural exports from South America could accelerate Amazon deforestation, despite sustainability commitments embedded in the agreement.

In response to these concerns, EU institutions reached provisional agreement in December 2025 on a dedicated Mercosur safeguards regulation. The measure would allow the temporary suspension of tariff preferences if imports cause serious harm to EU producers and includes enhanced monitoring for sensitive products such as beef, poultry, pork, sugar, ethanol, rice, and honey. While politically significant, these safeguards have not fully neutralized opposition.

Supporters argue that the agreement’s geopolitical value has only increased. Amid strained transatlantic trade relations and ongoing friction with China, Mercosur offers the EU a major opportunity for trade diversification. The deal would improve access to critical raw materials—such as lithium, niobium, manganese, and aluminum—essential for Europe’s green and digital transitions.

On the Mercosur side, political support remains strong across Argentina, Brazil, Paraguay, and Uruguay, though the timing and mechanics of ratification will vary by country. Argentina’s current government has signaled openness to swift implementation, but formal legislative processes remain.

Within the EU, the Commission retains the option to seek provisional application of the iTA while the ECJ conducts its review. Doing so would require member-state backing and would remain politically contentious. Although Parliament does not directly veto provisional application, it retains significant influence and could attempt to challenge or constrain the process.

The EU-Mercosur agreement has cleared meaningful institutional hurdles with Council approval and formal signing, but the European Parliament’s ECJ referral exposes deep and unresolved divisions. The coming 12 to 24 months represent both a risk and an opportunity—time for legal clarification and political compromise, but also for opposition to harden.

Strategically, the case for the agreement remains strong. Politically, its future is anything but assured.