After 25 years of negotiations, the European Union (EU) and four Mercosur countries – Argentina, Brazil, Paraguay, and Uruguay – reached a political agreement on 6 December 2024 on a Partnership Agreement (EU-Mercosur Agreement). The geopolitical and geoeconomic importance of this Agreement cannot be understated (see further Larik). At a time where trade is increasingly weaponised for economic blackmail, the EU-Mercosur Agreement establishes one of the largest free trade zones, as well as institutional and political cooperation, through law. Against this background, it came as a surprise when a narrow majority in the European Parliament (EP), backed by far-right and far-left parties alike, voted on 21 January 2026 to request an opinion on the compatibility of the EU-Mercosur Partnership Agreement (EMPA) and the accompanying Interim Trade Agreement (ITA) with EU law. By contesting the legality of the EU-Mercosur Agreement, the EP may have shot itself in the foot for three main reasons: First, by contesting the legality of the ITA, the EP risks losing a formal say over the temporal application of the “trade part” of broader mixed agreements pending ratification in the Member States. Second, it remains unlikely that the Court will derail the EU-Mercosur Agreement as it has already addressed the main points raised in the EP Resolution in prior case law, finding no incompatibility with EU law. Third, the request for an opinion may not even delay the provisional application of the EU-Mercosur Agreement. The legal insights and practical impact of the anticipated opinion might therefore not outweigh the inter-institutional and global political upheaval caused by the EP Resolution.

ITAs as tools to enhance the EP’s powers

From a political perspective, it may be self-sabotaging for the EP to contest the legality of the ITA. In essence, the ITA is a stand-alone version of the “trade part” (Part III, Chapters 9 et seq.) of the EMPA. Because the scope of the ITA is confined to the EU’s exclusive trade powers (Article 3(1)(e) TFEU), it must be concluded by the EU alone. The EMPA, by contrast, comprises also shared competences, enabling the Member States to become contracting parties in their own right alongside the EU (“mixed agreement”). The ratification of the EMPA by all national parliaments can easily take 10+ years, which explains the need for an interim agreement to apply in the meantime. The ITA will be repealed and replaced by the EMPA once the latter enters into force (Article 23.10 ITA).

As the ITA is designed to bridge the time between signature and entry into force of the EMPA, it fulfils the same function as provisional application (Article 25 VCLT, Art. 218(5) TFEU). Using an interim agreement instead of provisional application however increases the EP’s formal powers over the temporal application of the trade part of a broader mixed agreement. Because the ITA is a stand-alone agreement, the EP must consent to its conclusion in accordance with Article 218(6)(a)(v) TFEU. Had the EMPA simply been provisionally applied in full, the EP would not have had a formal legal say over the temporal application of the trade part of EMPA pending its entry into force. Pursuant to Article 218(5) TFEU, the provisional application of EU agreements can be decided by the Council alone. If the Court were to find that the Commission has no power to create self-standing interim agreements (which is unlikely, see below), the Commission could (also for future agreements) go back to proposing the provisional application of mixed trade agreements in full, which would formally leave the EP without veto powers over the temporal application of the trade part of such agreements. Moreover, in such a scenario, it would also be uncertain whether the EP could still rely on the political goodwill (p. 17) of the Commission to await the EP’s consent before proposing the provisional application of EU trade agreements to the Council.

The legality of the ITA

Aside from potentially being political self-sabotaging, the legal chances of success of the EP’s request remain low (or, in Chamon’s words, “almost non-existent”), as the Court has already addressed the two main issues raised in the EP’s Resolution in prior case law and found no incompatibilities with EU law.

The first main issue raised in the EP Resolution is the legality of the ITA. In its 1999 negotiating directives, the Council had authorised the Commission to negotiate a single mixed agreement. According to the EP, the Commission exceeded the scope of these directives by proposing the signature and provisional application of a separate “EU-only” ITA to the Council, thereby breaching Article 218(4) TFEU, as well as the principles of conferral, institutional balance and sincere cooperation. Yet, the EP’s argument appears superfluous in light of prior case law. In Australia ETS, the Court held that “it is contrary to Article 218(4) TFEU for the [negotiating] positions established by the special committee or, as the case may be, the Council itself to be binding” (para 88). As the Council has veto powers over the signature and provisional application of the agreement under Article 218(5) TFEU, the Commission’s “unilateral negotiating” powers under Article 218(4) TFEU are limited by law and in practice. One could even argue – as the Council did in Opinion 3/94 – that the Council’s decision “to sign an agreement negotiated by the Commission implies approval of its contents and makes good any irregularity during the course of the negotiations”. Notably, the Council has already decided to sign the EMPA and the ITA. A qualified majority of Member States in the Council therefore support the ITA while the ratification of the EMPA is pending.

The fact that the ITA turns out to be “EU-only” agreement does also not indicate a breach of Article 218(4) TFEU, or the principles of conferral, institutional balance, and sincere cooperation. The character of an agreement – be that EU-only or mixed – depends on the division of competences between the EU and the Member States and can thus only be determined on the basis of the content of the agreement, i.e. after the negotiations are finalised. The content of the ITA indicates that the agreement squarely falls within EU exclusive competence and therefore must, as a matter of law, be concluded by the EU alone (c.f. Opinion 2/15). The Council’s decision to sign the ITA signals its approval of the ITA’s content and character. Whether or not the Council had, when it originally proposed the negotiations back in 1999, a single mixed agreement in mind is irrelevant. Political realities may change, and the procedure foreseen in Article 218(4-6) TFEU offers sufficient flexibility to the EU legislature to adjust accordingly.

Compliance with the precautionary principle and the rebalancing mechanism

The second main issue raised by the EP is the ITA’s compliance with the precautionary principle. Notably, the precautionary principle is firmly anchored in Article 18.10(2) ITA. Yet, measures adopted under the precautionary principle by one party could be brought before an arbitration panel by another party under the so-called rebalancing mechanism (Article 21.4(b) ITA). Accordingly, a party can challenge a measure applied by another party that “nullifies or substantially impairs any benefit accruing to it” irrespective of whether that measure conflicts the ITA. Simply put, the rebalancing mechanism aims to find solutions in case measures not breaching the agreement have severe impacts on trade, which may include financial compensation. The EP argues that such compensation may pressure the EU not to adopt measures under the precautionary principle, thereby threatening “the EU’s ability to maintain the autonomy of the EU legal order”. Yet, this argument will likely not hold before the Court for two main reasons. First, the rebalancing mechanism leaves the EU with discretion to maintain the legal status quo. The arbitration panel cannot mandate the parties to change their domestic laws (Article 21.14(10)(c) ITA). What is more, the panel will only suggest compensation if both parties agree, and such suggestions are not legally binding (Article 21.14(10)(d) ITA). The rebalancing mechanism is primarily a tool to create consultations between the parties leading to a mutually agreed solutions (Article 21.17(2) ITA). As a result, it is unlikely to preclude a party from adopting measures under the precautionary principle.

Second, even if the EU were to face compensations for a measure adopted under the precautionary principle (e.g. under Article 21(4)(a) ITA), this would likely not affect the autonomy of EU law. The Court has already assessed a similar question in Opinion 1/17 on the compatibility of CETA with the autonomy of EU law. Here, the Court was essentially asked whether compensations levied by the CETA arbitration tribunal could risk the level of public interest protection set by the EU legislature. The Court held that the “CETA tribunal has no jurisdiction to declare incompatible with the CETA the level of protection of a public interest established by EU measures […] and on that basis, to order the Union to pay damages” (para 153). Henceforth, the Court found CETA to be compatible with the autonomy of EU law (paras 160-161). While the Court may fire a similar “warning shot” in the direction of the ITA panel, it would likely reach the same conclusion regarding the compatibility of the agreement with the autonomy of EU law.

The opinion request may not delay the provisional application of the EU-Mercosur Agreement

Finally, the EP’s request for an opinion is unlikely to cause delays in the provisional application of the EMPA and ITA. The EP cannot vote on the conclusion of the EU-Mercosur Agreement while the opinion is pending. Yet, the EU-Mercosur Agreement may be provisionally applied (Article 23.3(2) ITA, Article 30.2 EMPA). The Council has authorised the signature and provisional application of the EMPA and ITA on 9 January 2025 – two weeks prior to the EP’s decision to refer the EU-Mercosur Agreement to the Court. Notably, the Council mandated that the EMPA and ITA “shall be applied on a provisional basis”. The wording of the Council Decisions does not leave the Commission with discretion to await the outcome of the opinion procedure and/or the EP’s decision under Article 218(6) TFEU. It would arguably require an amendment of the Council Decisions to enable the Commission to halt the provisional application. Even the EP appears to have accepted that the “Commission may opt for the provisional application of the agreement once at least one Mercosur country has completed its ratification.” Yet, the EP retains the power to consent or reject the conclusion of the ITA and the EMPA under Article 218(6) TFEU. A definite rejection of either agreement by the EP would lead to the termination of its provisional application (Article 25(2) VCLT).

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