Testing the legality: The European Parliament requests an Opinion from the EU’s Court of Justice regarding the EU-Mercosur Partnership Agreement

Nearly 26 years after the initial start of trade negotiation, on 17 January 2026, the EU and Mercosur reached a political milestone with the signing of the EU-Mercosur Partnership Agreement (hereinafter, the EMPA). Yet, the signature of the agreement does not mark the end of the story as, on 21 January 2026, the European Parliament requested an Opinion from the Court of Justice of the European Union (hereinafter, CJEU) on the compatibility of certain elements of the EU-Mercosur Partnership Agreement with the EU treaties, effectively suspending the legislative process at the European Parliament, pending the judicial clarification. 

This article provides some background on the EU-Mercosur Partnership Agreement, analyses some of the legal questions submitted by the European Parliament to the CJEU, and details the next steps for the Agreement’s implementation.

Decades in the making

The negotiations for the EU-Mercosur Partnership Agreement were first launched in 2000, but negotiations were stalled due to, inter alia, disagreements over market access issues. Negotiations were relaunched in May 2016 and, on 6 December 2024, the EU and Mercosur announced that they had reached a political agreement on the EU-Mercosur Partnership Agreement. Negotiations for the EU-Mercosur Partnership Agreement were launched as a mixed framework agreement, encompassing policy areas that fall within the EU’s exclusive competence (e.g., trade in goods) and partly within the competence of EU Member States (e.g., public procurement).

In order to accelerate the implementation of the Agreement, on 3 September 2025, the European Commission split the Agreement into the broader EMPA and into an EU-only interim Trade Agreement (hereinafter, iTA), to allow the trade provisions to be applied more quickly after ratification by the EU and Mercosur countries, while the EMPA undergoes ratification by all EU Member States. On the EU side, the iTA only requires a qualified majority in the Council of the EU and consent by the European Parliament. 

On 9 January 2026, the Council of the EU adopted two decisions authorising the conclusion and signing of the EU-Mercosur Partnership Agreement and the Interim Trade Agreement. Under EU rules, the European Parliament must give its consent to trade agreements concluded under Article 218 of the Treaty on the Functioning of the European Union (hereinafter, TFEU). On 21 January 2026, the European Parliament requested an opinion from the CJEU on the compatibility of the EU-Mercosur Association Agreement with the EU treaties, raising a number of issues.

Key issues: Questions to be assessed by the CJEU

The request by the European Parliament was lodged pursuant to Article 218(11) of the TFEU through the adoption of a Resolution seeking an opinion from the Court of Justice on the compatibility with the Treaties of the proposed Partnership Agreement between the EU and Mercosur countries. The European Parliament requests the CJEU to assess the legality of certain aspects of the EU-Mercosur Partnership Agreement under EU law, namely: 1) The lawfulness of splitting the agreement; 2) The “rebalancing clause”; and 3) The impact on the precautionary principle allowing the adoption of sanitary and phytosanitary (SPS) measures without sufficient scientific evidence.

The request for an opinion from the CJEU suspends the procedure within the European Parliament to give its consent to both the EMPA and the iTA. The European Parliament’s legal service must now convert the resolution into a formal legal request, which may take at least several weeks. Procedures for opinions by the CJEU then typically take 16 to 25 months. For instance, Opinion 2/15 of the CJEU regarding certain aspects of the EU-Singapore FTA was issued within 22 months. 

The legality of splitting the Agreement

One of the areas of concerns of the European Parliament refers to the splitting of the Agreement into the EMPA and the iTA, which the European Parliament argues is against the Council of the EU’s negotiation mandate. Negotiations for the EU-Mercosur Partnership Agreement were launched as an Association Agreement, which traditionally referred to a single mixed agreement that requires ratification by the EU and all EU Member States.

The CJEU Opinion 2/15 on the EU-Singapore FTA concluded that the EU has discretion to structure or sequence agreements, as long as the content of the agreement stay within the legal competences conferred under the TFEU. Therefore, the central question for the CJEU will be whether the iTA is genuinely confined to matters falling within the EU’s exclusive competence under Article 3(1) of the TFEU or whether it is intertwined with elements that remain within shared or EU Member State competence.

The “rebalancing clause”

A central point of contention concerns the inclusion of a “rebalancing clause” provided under Article 21.4(b) of the Agreement, which allows a Party to seek compensation when a measure adopted by the other Party nullifies or substantially impairs a benefit under the Agreement “in a manner adversely affecting trade between the parties, whether or not such measure conflicts with the provisions of the Agreement”.

The European Parliament notes that, while a “rebalancing clause” can also be found under Article XXIII:1(b) of the General Agreement on Tariffs and Trade (GATT), it considers the provision under the EMPA to be more “wide reaching than existing ones in previous free trade agreements concluded by the EU and differs in scope and content” from Article XXIII:1(b) of the GATT. 

In this context, Article 26(1) of the WTO DSU clarifies that, even if a measure is found by a WTO panel to “nullify or impair benefits” under the Agreement, “there is no obligation to withdraw the measure” and a Panel would only recommend that the WTO Member concerned “make a mutually satisfactory adjustment”. However, under the iTA, if a dispute settlement panel has found “nullification” of “substantial impairment” under Article 21.4(b) thereof, the complaining Party may adopt countermeasures under Articles 21.20 and 21.21, and such countermeasures would be suspended only once the measure in question has been withdrawn or amended.

Therefore, the European Parliament is concerned that the “rebalancing clause” enables corrective action in response to a regulatory or policy development by the other Party, particularly in relation to adopting or enforcing legislation in sensitive areas, such as climate and environmental protection and higher levels of food safety, which are protected under the TFEU. The European Parliament is also concerned that the “rebalancing clause” could “incite the EU co-legislators to refrain from adopting such measures and put pressure on the Commission to withdraw, amend or halt the implementation of current legislation”, which could affect the EU’s regulatory sovereignty.

While the European Parliament raises concerns that the scope of the “rebalancing clause” could result in economic pressure on the EU when adopting new regulations, the legal structure of the “rebalancing clause” closely mirrors Article XXIII:1(b) of the GATT and Article 26(1) of the DSU. A WTO Panel found that Article XXIII:1(b) of the GATT “should be approached with caution and should remain an exceptional remedy”.

What’s next: Provisional application of the Interim Trade Agreement?

As noted above, the Opinion of the CJEU will likely only be handed down in 2027 or 2028. In view of this delay regarding the European Parliament’s consent, EU Member States and the European Commission have been floating the idea of a provisional application of the iTA. Article 23.2 of the iTA provides that the provisional application of the iTA between the EU and a signatory Mercosur State “shall begin on the first day of the second month following the date on which the European Union and that Signatory MERCOSUR State have notified each other of the completion of their respective internal procedures or ratification of the Agreement and confirm their agreement to provisionally apply the Agreement”.

Article 3 of the Council Decision on the signing of the EU-Mercosur Interim Trade Agreement allows the Agreement to be applied provisionally “from the first day of the second month” following the date that a Mercosur signatory has completed the respective internal procedures for provisional application and notified the EU of its agreement to apply the iTA on a provisional basis, with the date of provisional application subsequently published in the EU’s Official Journal. This is in line with Article 218(5) of the TFEU, which provides that the Council of the EU, “on a proposal by the negotiator, shall adopt a decision authorising the signing of the agreement and, if necessary, its provisional application before entry into force”. Various Mercosur countries have already begun their respective ratification processes. For instance, Brazil expects to complete its ratification by June 2026, while Argentina, Paraguay, and Uruguay have indicated possible ratification by April 2026. 

The provisional application of the iTA would offer an interim solution, allowing the trade pillar of the broader EMPA to be applied, pending judicial clarification of the European Parliament’s concerns.