EU Parliament refers Mercosur trade deal to bloc's top court

The European Union's parliament voted on Wednesday to refer a freshly signed trade deal with South American bloc Mercosur to the EU's top court, casting the hard-fought accord into legal limbo.

Signed on Saturday with Brazil, Argentina, Uruguay and Paraguay, the pact to create one of the world's largest free trade areas has been fiercely opposed by farmers' groups backed by France and others.

Lawmakers in Strasbourg voted 334 to 324 in favour of asking the Court of Justice of the European Union (CJEU) to determine whether the deal is compatible with the bloc's rules.

Hundreds of farmers had gathered with tractors outside the parliament building ahead of Wednesday's vote – and erupted in celebration as the result came in.

"We've been on this for months and months, for years," a euphoric Quentin Le Guillous, head of a French young farmers group, told AFP outside the EU parliament.

"Tonight, I'm going home, I'm going to kiss everyone, and I'm going to tell my kids, 'I got it, we got it, we can be proud.'"

The court will now have to assess the legal challenge, a process that could delay and even derail a deal seen as a cornerstone of a Brussels push to open up new markets.

Decision 'not justified'

The vote deals a blow to the European Commission, whose president Ursula von der Leyen had given a speech to parliament just hours earlier touting the "historic deal."

More than 25 years in the making, the EU-Mercosur deal was given fresh impetus amid the sweeping use of tariffs and trade threats by US President Donald Trump's administration, which has sent countries scrambling for new partnerships.

The commission, which championed and negotiated the pact that eliminates tariffs on more than 90 percent of bilateral trade, said it "regrets" the lawmakers' decision.

"According to our analysis, the questions raised in the motion by the parliament are not justified because the commission has already addressed those questions and issues in a very detailed way," European Commission trade spokesman Olof Gill told reporters in Brussels.

The court challenge centres on whether the deal can be partially applied before full ratification from member states, as envisaged by the commission, and if it unlawfully restricts Brussels' powers on some environmental and food safety matters.

The head of German auto industry group VDA decried the EU parliament's decision, saying it sent a "devastating sign" and risked irking Mercosur countries.  

"Europe is weakening itself with the EU Parliament's decision at a time when geopolitical stability and reliable international partnerships are more urgent than ever," Hildegard Mueller said.

'The fight continues'

Parliament will now wait for the court's opinion before holding a vote on whether to approve the Mercosur deal – a necessary step for it to fully come into force.

But the commission could push ahead and apply it provisionally, also pending judgement, a potentially politically explosive move.

Key power Germany, as well as Spain and the Nordic countries, strongly support the pact, eager to boost exports as Europe grapples with Chinese competition and a tariff-happy administration in the White House.

"We are convinced of the legality of the agreement. No more delays. The agreement must now be provisionally applied," German Chancellor Friedrich Merz said after the vote. 

But France, Poland, Austria Ireland and Hungary oppose it over concerns for their agricultural sectors.

"The fight continues to protect our agriculture and guarantee our food sovereignty," said French foreign minister Jean-Noel Barrot. 

The deal 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.

This has angered many European farmers, who have rolled tractors into Paris, Brussels and Warsaw to protest a feared influx of cheaper goods produced with lower standards and banned pesticides.

"It feels good, finally a victory," French farmer Alice Avisse, 52, said of the vote, cautioning however that it was "only a small battle in a larger war".

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