The European Union will provisionally apply its trade deal with the Mercosur group of South American countries, overriding concern from some lawmakers who have sent the deal for a test at the bloc’s top court.
Ursula von der Leyen, who leads the bloc’s executive arm as European Commission president, justified the move, saying the deal “gives Europe a strategic first mover advantage in a world of sharp competition and short horizons.”
“Provisional application is, by its nature, provisional,” von der Leyen added. “The agreement can only be fully concluded once the European Parliament has given its consent.”
French President Emmanuel Macron, a critic of the deal, called the decision a “bad surprise” at an event in Paris on Friday. The country’s trade minister, Nicolas Forissier, said in a statement that the development “constitutes a questionable method and a legitimate source of concern for our farmers as well as for our fellow citizens.”
The deal has faced fierce opposition in Europe from countries with significant farming industries, particularly France, though a majority of EU countries backed it, paving the way for its ratification.
The announcement comes as Argentina and Uruguay ratified the deal, a move that was hailed by European Council President António Costa. Brazil and Paraguay are the other two members of the Mercosur group which signed the deal with the EU.
The EU and Mercosur clinched one of the world’s largest free-trade agreements in January after 25 years of negotiations. The pact will create an integrated market of 780 million consumers and strengthen Europe’s foothold in a resource-rich region that’s increasingly contested by the United States and China.
The deal still faces a hurdle at the EU’s top court, after lawmakers in the bloc’s parliament voted to submit it for a judicial review. However the head of the parliament’s influential trade committee, Bernd Lange, described the decision to apply the deal provisionally as “the right one.”
The EU’s provisional application will take effect on the first day of the second month following the date on which the EU and Uruguay exchange formal diplomatic communication, according to the European Commission. It would then apply to all Mercosur countries that have ratified the deal.
by Max Ramsay, Bloomberg
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