EU provisionally applies trade deal with Mercosur

European Commission President Ursula von der Leyen announced on February 27 the provisional application of the EU-Mercosur trade agreement, without awaiting ratification by the European Parliament. This move, welcomed in Berlin, comes as Emmanuel Macron appears weakened on the European stage following the failed dissolution of the National Assembly in June 2024. It highlights Franco-German tensions amid the Paris Agricultural Show and ahead of municipal elections.

Emmanuel Macron, limited by national impotence since the dissolution of the National Assembly in June 2024, is seen as weakened in Brussels, akin to a "lame duck." Ursula von der Leyen's announcement on Friday, February 27, of the provisional application of the EU-Mercosur trade agreement—bypassing European Parliament ratification—could not have come at a worse time for the French president. The move delighted Berlin but left Macron vulnerable to criticism in France, during the Agricultural Show, less than a month before municipal elections and a year and a half from the presidential vote where the National Rally leads in polls.

This development reflects a European landscape where France appears sidelined. While Macron has won ideological battles on European sovereignty, his current standing is reduced. Analyses point to the need to revive the Franco-German engine to bolster France's role in the EU, preventing the spillover of domestic challenges to the continental stage.

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Chancellor Friedrich Merz announces provisional EU-Mercosur trade deal at Deutsche Börse New Year's event.
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Merz expects provisional entry into force of Mercosur agreement

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Chancellor Friedrich Merz announced at the Deutsche Börse New Year's reception in Eschborn that the EU free trade agreement with Mercosur states will enter provisional force before the completion of an EuGH review. He views it as a path to greater European independence in an uncertain world order. The agreement was signed at the start of the year after more than 25 years of negotiations.

The European Parliament rejected a motion of censure against Commission President Ursula von der Leyen on Thursday, January 22, initiated by the far right over disputes surrounding the Mercosur agreement. The motion garnered only 165 votes in favor against 390 against. The French government firmly opposes any provisional application of the treaty, calling it a 'democratic violation'.

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The EU Parliament has narrowly voted to request a legal review of the Mercosur trade agreement by the European Court of Justice. Wednesday's vote delays ratification by months or even years. Supporters criticize the move as a mistake amid geopolitical tensions.

Commerce Minister Piyush Goyal defended the newly concluded India-EU free trade agreement against domestic criticism, emphasizing its benefits for economic growth. The deal addresses key issues like carbon tariffs and mobility for professionals. However, US Treasury Secretary Scott Bessent expressed disappointment, accusing Europe of prioritizing trade over support for Ukraine.

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