Why was the Mercosur–European Union agreement put on hold?

Just days after the agreement was signed in Paraguay by regional bloc authorities, with the presence of European Commission President Ursula von der Leyen, European authorities decided to halt the process pending a judicial ruling.

This decision implies a temporary suspension of the ratification process, although it does not rule out the possible provisional application of the agreement, which remains under review by the European Commission.

As regards the manufacturing sector within Mercosur, the footwear industries of Brazil and Argentina had welcomed the agreement, due to the range of benefits expected from its implementation over the coming years.

The last-minute reversal was mainly driven by the lack of consensus within the European Council, led primarily by opposition from France and Italy. Both countries, under strong pressure from their agricultural sectors, demanded stricter safeguard measures to protect local producers from South American competition.

The three key factors behind the delay:

1. Judicial pause (January 2026): The European Parliament recently voted (334 in favor, 324 against) to submit the agreement to the Court of Justice of the EU (CJEU), to assess its compatibility with EU treaties and whether the “rebalancing mechanism” undermines EU regulatory autonomy. This process could delay ratification by 18 to 24 months.
2. Agricultural protests: Large-scale demonstrations by farmers in Brussels and Strasbourg, including tractor blockades of official buildings, forced European leaders to step back. Producers claim “unfair competition” due to differences in environmental standards and pesticide use.
3. Lack of political unanimity: Although countries like Germany and Spain are pushing for the pact, France's blockade and last-minute doubts from Italy, Poland, and Austria have broken the majority needed to proceed.

This new impasse leaves the treaty in a legal and political limbo, eroding the credibility of the negotiations after more than 25 years of attempts.

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