The European Union’s long-awaited free trade agreement with Mercosur countries is likely to be applied provisionally from as early as March, according to an EU diplomat. The move could go ahead once the first Mercosur nation ratifies the pact, with Paraguay expected to do so in the coming weeks, allowing parts of the deal to take effect despite ongoing political and legal hurdles within the EU.

Momentum behind the agreement has been complicated by EU lawmakers referring the deal to the European Court of Justice, a step that could delay full implementation by up to two years. The referral has disappointed several EU governments and businesses, particularly in Germany, where the deal is strongly supported as a driver of growth. German Chancellor Friedrich Merz criticised the move, stressing that the agreement remains essential for Europe’s economic future.

Signed after 25 years of negotiations, the EU-Mercosur pact is the bloc’s largest trade deal to date and is seen by supporters as a way to offset losses from U.S. tariffs and reduce dependence on China. However, opposition remains strong, led by France and farming groups, who warn that increased imports of South American agricultural products could undermine European farmers and disrupt local markets.

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