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EU-Mercosur Deal on Hold, Referred to EU Court

Published January 21, 2026, 12:37

The European Parliament has put the trade agreement between the European Union and Mercosur (Brazil, Argentina, Paraguay, Uruguay) on hold, referring it to the EU Court of Justice to examine its legal basis. The decision was made by a narrow margin (334 votes in favor, 324 against, and 10 abstentions) and comes after years of negotiations. The referral to the EU Court of Justice could delay the implementation of the agreement for up to two years. The agreement covers a market of approximately 700 million citizens and is considered important for trade relations between the two blocs. The European Parliament's decision took place amid strong protests from farmers across Europe, who express fears about competition from Mercosur products. Farmers are demonstrating outside the European Parliament building in Strasbourg, while strong police forces have been deployed. The European Commission has limited options. Theoretically, it could proceed with the provisional application of the agreement, but this could create problems in its relations with the European Parliament. The EU Court of Justice will examine whether the agreement is compatible with EU law and may request amendments.