European Union trade deal with South America could begin as early as March

A major trade agreement between the European Union and four South American countries could begin operating as early as March, even though European lawmakers have sent it to the bloc’s highest court for review.

An EU official told Reuters on Thursday that the deal with Brazil, Argentina, Paraguay and Uruguay will likely start working on a temporary basis once the first South American country approves it. That country is expected to be Paraguay, which could ratify the agreement in March.

The news comes one day after European Parliament members decided to send the trade pact to the European Court of Justice, a move that could push back full implementation by two years. The EU finished the deal with Mercosur members last Saturday after 25 years of back-and-forth negotiations, making it the largest trade agreement the bloc has ever signed.

The delay upset businesses in Germany and disappointed Chancellor Friedrich Merz, one of the deal’s strongest supporters. Speaking at the World Economic Forum in Davos, Switzerland on Thursday, Merz expressed regret over the European Parliament’s decision.

“But rest assured: We will not be stopped. The Mercosur deal is fair and balanced. There is no alternative to it if we want to have higher growth in Europe,” Merz told attendees.

Those in favor of the agreement say it matters now more than ever as businesses look for ways to make up for losses from American tariffs and become less dependent on China for trade. On the other side, France leads a group of countries opposing the deal, arguing it will bring in low-cost beef, sugar and poultry that will hurt their own farmers.

Meanwhile, India is preparing to finalize a major trade agreement with the European Union. Agriculture will not be part of the agreement, but it shows growing economic cooperation between India and the EU in other important areas.

Top EU officials are expected to travel to New Delhi to complete the deal, according to media reports. A report from Euractiv published on January 14, 2026, indicates that agriculture was deliberately left out of the agreement.

European Commission President Ursula von der Leyen reportedly told European Parliament members in a private meeting that the agreement would be signed this month and would not cover agricultural sectors. Von der Leyen and European Council President António Costa are expected to sign the agreement with Indian Prime Minister Narendra Modi during their New Delhi visit between January 25 and 27, 2026.

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