The deal, covering Brazil, Argentina, Paraguay and Uruguay, represents the EU’s largest trade pact to date and comes after more than two decades of negotiations.

An EU diplomat said provisional application could begin once the first Mercosur country completes ratification, with Paraguay expected to do so as early as March.

This approach would allow parts of the agreement to take effect while legal scrutiny continues, a move supporters see as essential to protect European economic interests in an increasingly competitive global trade environment.

The provisional rollout comes despite EU lawmakers referring the agreement to the European Court of Justice, a step that could delay full implementation by up to two years. The referral reflects deep divisions within the bloc, particularly concerns about democratic oversight, environmental standards and the impact on sensitive sectors such as agriculture.

Germany has emerged as one of the strongest backers of the agreement, arguing that Europe needs new export markets to counterbalance trade losses from U.S. tariffs and to reduce economic dependence on China.

German officials and business leaders warn that further delays could undermine Europe’s competitiveness at a time of slowing growth and rising geopolitical uncertainty.

Chancellor Friedrich Merz described the parliamentary referral as a setback but insisted the deal remains vital for Europe’s future.

Speaking to business and political leaders, he said the agreement was fair, balanced and necessary to boost growth, investment and strategic autonomy across the continent.

Major European companies have echoed this view, saying the trade pact would improve access to fast-growing South American markets and strengthen supply chains.

Logistics and manufacturing firms in particular see the agreement as a way to lower tariffs, reduce regulatory barriers and support long-term job creation.

France, however, continues to lead opposition to the deal, citing fears that cheaper imports of beef, sugar and poultry would undercut domestic farmers.

French agricultural unions have staged large-scale protests, including tractor blockades in major cities, warning that the agreement could devastate rural livelihoods and weaken food security standards.

French officials have also raised democratic concerns, arguing that provisional implementation before full parliamentary approval would bypass national legislatures.

Farm lobby leaders have labelled such a move unacceptable, saying it would erode public trust in EU decision-making and fuel political backlash.

Despite these objections, supporters note that provisional application is a standard EU practice used in previous trade agreements.

They argue it allows businesses to benefit from reduced tariffs and improved market access while courts and parliaments complete their reviews, with safeguards in place should the deal later be rejected.

The European Parliament would retain the power to annul the agreement if legal or political objections ultimately prevail.

This has done little to ease tensions, however, as critics fear that once economic benefits begin to flow, reversing the pact would become politically difficult.

The European Commission has said it will consult closely with member states and lawmakers before deciding the next steps.

EU leaders are also weighing the broader geopolitical context, including strained transatlantic relations and growing pressure to diversify trade partnerships amid shifting global alliances.

As debates continue, the likely provisional start in March highlights the EU’s determination to move forward despite internal divisions.

Whether the Mercosur deal becomes a cornerstone of Europe’s trade strategy or a flashpoint for deeper political conflict will depend on how these tensions are managed in the months ahead.

The agreement is designed to strengthen economic ties between Europe and South America at a time of rising global uncertainty and shifting trade alliances. European leaders argue the deal will help offset losses caused by higher United States tariffs and reduce long term dependence on China.

Supporters say the accord secures access to key markets and critical raw materials while opening new opportunities for European exporters. Machinery chemicals vehicles and industrial goods are expected to benefit most from the removal of billions of euros in tariffs.

Germany Spain and several other EU countries have strongly supported the agreement citing the need for diversified supply chains and resilient trade flows. Officials believe deeper engagement with South America will reinforce multilateral trade principles and economic stability.

France emerged as the most prominent opponent of the deal warning it could harm domestic farmers and agricultural producers. French leaders argue that increased imports of beef poultry and sugar could undercut local producers and weaken rural economies.

Farmers across several European countries staged protests as the decision approached blocking highways and organizing large demonstrations. These protests reflect wider concerns about food standards environmental protection and fair competition within the European market.

Despite opposition from France and a handful of other states a qualified majority of EU members voted in favor of the accord. The approval allows the European Commission to move ahead with the formal signing alongside Mercosur partners Argentina Brazil Paraguay and Uruguay.

The agreement still requires approval from the European Parliament before it can enter into force. Lawmakers are expected to debate the deal intensely with votes likely to hinge on environmental safeguards agricultural protections and enforcement mechanisms.

To address concerns the European Commission included safeguard measures allowing temporary limits on sensitive imports. These measures also include stricter checks on pesticide residues a crisis fund for farmers and commitments to support sustainable agriculture.

Environmental groups continue to oppose the accord arguing it could accelerate deforestation in the Amazon and weaken climate goals. Critics say stronger guarantees are needed to ensure that trade expansion does not come at the cost of ecosystems and indigenous communities.

Backers counter that the agreement includes sustainability chapters and dialogue mechanisms to promote responsible production. They argue that engagement rather than isolation offers the best chance to influence environmental and labor standards abroad.

If ratified the deal would eliminate roughly four billion euros in duties on European exports and expand trade already valued at over one hundred billion euros annually. The accord would mark a major shift in global trade architecture and signal renewed confidence in long term cooperation.