Blockbuster EU-Mercosur trade deal set to enter into force

The European Union's mammoth trade deal with the South American bloc Mercosur provisionally enters into force Friday, despite a pending court ruling on its legality.

The agreement to create one of the world's biggest free-trade zones was sealed in January after more than 25 years of intermittent negotiations.

Together, the EU and Mercosur account for 30 percent of global GDP and more than 700 million consumers.

The deal, which eliminates tariffs on more than 90 percent of trade between the two sides, has proven divisive in Europe, with France leading opposition over concerns some of its farmers will be left worse off.

But – backed by a majority of EU countries, including Spain and Germany – Brussels ploughed ahead as it pushes to diversify trade in the face of challenges from the United States and China.

European Commission chief Ursula von der Leyen on Friday hailed the start of the deal's implementation, stating on X: "Provisional application will show the agreement’s tangible benefits."

She said that "as of now... tariffs start falling," European companies "are gaining access to new markets” and investors are “benefiting from the predictability they need.”

The agreement favours European exports of cars, wine and cheese, while making it easier for South American beef, poultry, sugar, rice, honey and soybeans to enter Europe.

The first effects of the implementation are immediate, according to Brussels, with Von der Leyen branding them “real and already noticeable.”

From this Friday, tariffs on cars, pharmaceuticals and wine exported by the EU to Argentina, Brazil, Paraguay and Uruguay will be “eliminated or significantly reduced”, she added.

For European Commissioner for Trade Maros Sefcovic, “it is a great day” thanks to a “historic” agreement.

French MEP Manon Aubry disagrees. “In reality, it is a very sombre day,” she said.

European farmers “are going to face unfair competition from hundreds of thousands of tonnes of agricultural products that will flood the European market, with second-rate health and environmental standards,’”warned the left-wing Euro lawmaker.

Online talks

Von der Leyen said that "legitimate" sensitivities in the EU had been addressed.

To mark the day, von der Leyen and European Council President António Costa were to hold online talks with leaders from the Mercosur nations, which include Argentina and Brazil.

“From May 1, Mercosur and the European Union will begin to unite in one of the largest free trade areas on the planet … at a time of protectionism, we are strengthening multilateralism,” said Brazilian President Luiz Inácio Lula da Silva.

The application of the deal comes after the European Parliament referred it to the EU's top court in January, instead of giving it the green light.

France unsuccessfully attempted to block the deal over worries for its farmers, who fear being undercut by cheaper goods from agricultural powerhouse Brazil and its neighbours.

The staunch French opposition to the pact caused a public rift with export-dependent Germany, pitting the EU's two biggest countries against one another.

Germany's Foreign Minister Johann Wadephul on Friday issued his own social media post hailing the Mercosur deal's implementation.

"This strengthens our resilience & rules-based trade," he said in a post on the X social network.

At the same time as it has looked to wrap up the Mercosur deal, the EU has also ploughed on with other agreements to get closer to other important markets such as India, Australia and Indonesia.

– TIMES/AFP