EU Secures First-Mover Advantage with Provisional Mercosur Trade Deal

The European Union has opted for a provisional application of its contentious free trade deal with the South American bloc Mercosur, seeking a first-mover advantage, according to European Commission President Ursula von der Leyen. Typically, EU trade agreements await approval from member governments and the European Parliament.

However, after EU lawmakers last month decided to challenge the agreement in the bloc's top court, potentially delaying full implementation by up to two years, the provisional application will allow the EU and Mercosur to commence tariff reductions and implement other trade aspects of the deal.

The agreement involves Argentina, Brazil, Paraguay, and Uruguay, and is estimated to eliminate 4 billion euros in duties on EU goods exports. While Germany and Spain view the deal as critical to counteract lost business from U.S. tariffs and reduce reliance on China, France and other opponents express concerns over increased imports of cheaper agricultural products, which they believe will harm domestic farmers.