EU Provisionally Enacts FTA with Mercosur, Much to the Chagrin of France
On 27 February 2026, European Commission (EC) President Ursula von der Leyen decided to provisionally put into effect the EU-Mercosur Free Trade Agreement (#FTA) despite opposition from some countries and a judicial review aimed at suspending the ratification process.
To do so, Ursula von der Leyen made use of Section 218(5) of the Treaty on the Functioning of the European Union (TFEU) that provides powers to the EC to ‘provisionally put into effect’ the FTA before its ratification by the 27 member states, which is quite complex and will be an uphill battle, to say the least. On 9 January 2026, the EC held a vote on the issue, and the resolution passed with 21 votes for and 5 against, with opposition from France, Poland, Austria, Hungary, and Ireland. This vote provided the qualified majority needed for the provisional enactment.
From a long-term perspective, the EC plans to split the FTA into two parts: the Interim Trade Agreement (ITA) and the EU-Mersocur Partnership Agreement (EMPA). The ITA will comprise sections that are under the control of the EU, while the #EMPA will assemble the parts that require going through individual state ratification.
Immediately after the announcement by Von Der Leyen, French President Macron expressed his dissatisfaction at the move. France fears most that its farmers will be undercut by cheaper agricultural produce from Brazil and other #Mercosur members. He also believes the deal will allow Latin American wineries to eat the cheese of French one. Thus, Macron called out the ‘bad manners’ of Von Der Leyen, for giving him a ‘bad surprise!’
Ursula von der Leyen insists that the concerns of European farmers will be fully addressed via a series of safeguards. She pointed out that the advantages outweigh the disadvantages and painted the #FTA, which was 25 years in the making, as a positive and necessary breakthrough, especially given the current trade turmoil and geopolitical uncertainties.
On the #Mercosur side, Argentina and Uruguay became the first countries to ratify the FTA, and the process is expected to move along smoothly. Brazil and Paraguay are expected to follow soon. With the provisional green light from the EC and assuming the momentum of ratification in Mercosur continues, the FTA is expected to take effect by May 2026.
Faced with dwindling sales in US and China, Germany is eager to find new markets for its goods and vehicles. The Mersocur could also provide an alternative source to China for many #CriticalMinerals.