The headquarters of the European Commission in Brussels, Belgium. olrat - stock.adobe.com

European Commission President Ursula von der Leyen caused consternation in some Member States when, in February, she announced that the EU will provisionally implement its trade deal with the South American Mercosur bloc. A month earlier, the European Parliament had sent the deal to the Court of Justice of the European Union (CJEU) for judicial review, a move that was expected to delay its final ratification for up to two years.

Although the EU-Mercosur agreement was signed on 17 January, countries such as France and Poland have been opposed to the deal since negotiations began in 2020, arguing that opening up EU markets to imports from countries including Argentina, Brazil, Paraguay and Uruguay would put their own farmers at a disadvantage. The referral will see the CJEU consider whether the deal is compatible with the EU treaties.

The fact that the EU is pressing ahead before the Court’s opinion is known is ‘a surprise, and an unpleasant one’, said French President Emmanuel Macron. However, at a time when the protectionist stance of US President Donald Trump is causing disruption to global trading relationships, proponents of the deal point to the positives – such as the 600,000 European jobs the agreement is expected to support, and the potential boost to the bloc’s GDP of up to €77.6bn by 2040. Announcing the provisional implementation, von der Leyen said the aim is to deliver ‘a strategic first-mover advantage in a world of sharp competition and short horizons.’

The agreement will also ‘represent one of the largest interregional trade agreements in the world and a strong signal of continued commitment to open and rules-based international trade at a time of increasing protectionism,’ says de Carvalho. ‘Implementation at the present moment would be particularly significant, as countries around the world are seeking to diversify trade partners in a period of heightened uncertainty in relation to the US.’

Upon returning to office in 2025, President Trump imposed global tariffs on US imports, arguing they were needed to liberate his country from dependence on foreign goods and to boost jobs. In February, the US Supreme Court struck down the tariffs imposed by the President under the International Emergency Economic Powers Act. In a 6-3 ruling, America’s high court declared that the president lacks authority to impose tariffs without congressional approval. President Trump responded by announcing a new round of across-the-board tariffs under a different statute, imposed at a ten per cent rate.

Raj Bhala, an officer of the IBA International Trade and Customs Law Committee, says President Trump’s protectionist stance has helped accelerate the process for the EU-Mercosur deal. Notwithstanding the opposition that prompted the CJEU referral – which was backed by a slim majority – he says there’s been renewed enthusiasm for such deals precisely because of President Trump’s actions.

‘In 1823 US President James Monroe declared the Monroe Doctrine [which asserts that Europe and the Americas must remain separate in terms of spheres of influence],’ says Bhala, who’s also a University Distinguished Professor at the University of Kansas School of Law. ‘Monroe was picking up on George Washington’s farewell address in which he said the US should stay out of entanglements with Europe and not get involved in its wars. What Teddy Roosevelt and now Donald Trump with Venezuela have done is turn that into an interventionist rule: Ukraine is Europe’s problem; Hong Kong and the South China Sea are Asia’s problem; when it comes to the western hemisphere that’s our backyard.’

Bhala refers to the US strikes on Venezuela in January, during which the country’s president, Nicolás Maduro, was arrested and taken to the US to face charges, including narco-terrorism. He has pled not guilty. US Secretary of State Marco Rubio said that the action ‘underscored [President Trump’s] ironclad commitment to preventing the Western Hemisphere from becoming a safe haven for drug traffickers, Iranian proxies or hostile regimes that endanger our national security’.

‘Mercosur is the largest customs union after the EU,’ says Bhala. ‘It had been underperforming but, thanks to the US President and his antagonism to Brazil, which [during 2025] had 50 per cent tariffs imposed on it, Mercosur said that it won’t be pushed around under the new incarnation of the Monroe Doctrine and will sign deals outside [its] hemisphere, like with the EU.’

At the time of setting the 50 per cent rate in summer 2025, President Trump framed the tariffs on Brazilian goods as a reaction to the country’s prosecution of its former president Jair Bolsonaro – a Trump ally.

The other result of President Trump’s stance, says Bhala, is that the EU is developing free trade deals with Mercosur and India. The EU ‘has traditionally insisted on free trade deals that are broad and deep and it has insisted on environmental issues being addressed, but it has seen that it will have to compromise on some of those social justice-oriented demands,’ he explains.

Yves Melin, Co-Chair of the IBA International Trade and Customs Law Committee, says that when the negotiations with Mercosur began, the prospect of the EU making such concessions wouldn’t have been credible. ‘The idea of granting access to third parties that don’t respect your rules didn’t seem possible, but things have changed; there’s now a need to find allies,’ he says.

It’s for this reason that Melin – who’s a partner with Cassidy Levy Kent in Brussels – doesn’t believe the referral to the CJEU will derail the project. ‘The EU wants this, the vast majority of Member States want this, and the parliament is asking a legal question,’ he says. ‘It won’t result in a resounding no; there’s a willingness to have this signed.’

‘The Court’s opinion will clarify the legal structure of the agreement, but the European Commission has already signaled that it intends to proceed with the trade pillar regardless of the outcome,’ says de Carvalho. ‘In practice, this means that the commercial part of the agreement could potentially enter into force, at least provisionally, even if other parts require additional ratification steps.’ It’s also important to note, she adds, that ‘the agreement foresees the possibility of provisional and bilateral implementation of certain obligations, including tariff schedules.’