You are reading the 24th edition of the Green Trade Network's newsletter, coordinated by IEEP; this bi-monthly digest acts as a nexus for information and key happenings within the world of Green Trade. If this is your first time receiving it, you can find out more here.
The EU, and the « Art of the Deal »
It’s a mad, mad world. In just a few months, through threats over Greenland and yet another round of tariff-based intimidation, Donald Trump has managed the remarkable feat of pressing the accelerator of the EU’s bilateral trade negotiation agenda.
Within weeks, the EU wrapped up its long-stalled agreement with the Mercosur countries after more than 25 years of negotiations, and reached a political understanding with India on a gradual reduction of tariffs—ending years of inertia in the relationship. On the Mercosur deal, the “momentum” was quickly tempered. The European Parliament narrowly voted in favour of referring the EU–Mercosur agreement to the Court of Justice of the EU (CJEU), a move that could delay its entry into force by one to two years. Political signals point to a potential provisional application of the agreement even before the CJEU ruling. Earlier this week, German Chancellor Friedrich Merz indicated that provisional application would begin as soon as the first Mercosur country ratifies the agreement.
To unpack the political and institutional implications of this moment, Ignacio Garcia Bercero, Senior Visiting Fellow at Bruegel, and David Kleimann, PhD, Senior expert on the trade–climate–industry nexus, shared their assessments with us on the adoption of the EU–Mercosur agreement and its referral to the Court of Justice. We’ve chosen to feature the entirety of their comments below as they present different visions and arguments.
Ignacio Garcia Bercero
“The decision by the EP to refer the EU-Mercosur agreement to the ECJ is a delaying tactic that seriously undermines the international credibility of the EU.The legal arguments are without merit and the ECJ should give priority to a rapid adjudication of the case.It would be a political mistake, though to seek to apply the agreement provisionally prior to the assent of the EP. The legitimacy of trade agreements crucially depends on support by a majority both in the Council and the EP. Even if legally possible, a provisional application would undermine this principle. Moreover, it is unlikely that Mercosur countries would be ready to proceed to ratification while there is uncertainty about the ECJ ruling. Another option could be for the EP to adopt a Resolution that supports the provisional application of the agreement.MEPs that support Mercosur but wanted to have the legal issues clarified could support this resolution”
David Kleimann (PhD)
“The law on the provisional application of the EU-Mercosur Interim Trade Agreement is very clear: Article 3 of the Council decision on the signing and provisional application of the EU-Mercosur agreement puts provisional application on autopilot. The Commission has no discretionary decision-making power here whatsoever. Art. 3 makes for a clear and time-bound obligation for the Commission to notify Mercosur states of Union readiness to provisionally apply the interim agreement upon the receipt of such a notification from one or more Mercosur states to enable provisional application of the ITA on the first day of the second month following the receipt. The receipt of the first of these Mercosur notifications is expected for March, with Paraguay, Argentina, and Brazil fast-tracking their required internal procedures. Any attribution of responsibility for provisional application can only be accorded, retroactively, to the Council's qualified majority that adopted the decision. The pertinent legal provisions that this - politically agnostic - assessment is based on are Article 3 of the Council decision (compare to Article 1(2) of the Council decision on provisional application of CETA); Art. 288 TFEU and Article 17(2) TEU on the legal force and bindingness of these acts; and, with regard to 218(5) TFEU (on the signature and provisional application of international treaties) para 83 of Case C-551/21, which, by inference, defines the role of the European Commission. In more political language, the Council President has already underscored - and the Commission President has re-affirmed - the terms of the Council decision. Whether this is a politically wise path forward is a different question entirely. Any alternative way forward, however, would require a new Council decision on provisional application of the agreement.”
The open question is whether this momentum will also translate into renewed interest in other types of agreements—such as CTIPs and SIFAs—which are better suited to the needs of the green transition and to the realities faced by low- and middle-income countries in the Global South. Little progress appears to have been made on this front since the conclusion of the CTIP with South Africa, the final text of which fell well short of expectations (as we discussed in our previous edition of the GTN Newsletter).
Have a reaction or a question you’d like to share with the network? Feel free to get in touch—whether for a conversation or to grab a coffee in Brussels! You can now find us at Norrsken House (Rue du Commerce 72), where IEEP has recently joined a cohort of frontrunner organisations in what was formerly known as the “Sustainable Hub”.
Authors: Pierre Leturcq, IEEP, Columbia University – Center on Global Energy Policy (CGEP)
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About the Green Trade Network
The Green Trade Network (GTN) is a group of policy experts from 25 research organisations, ranging from think tanks to NGOs and academia, conducting evidence-based research and outreach activities on the trade and environment nexus. GTN member organisations are based in 9 EU Member States and the United States of America, the United Kingdom, and Switzerland. The GTN aims to collectively promote a European agenda for a better alignment of trade policies and trade-impacting measures with critical environmental and climate objectives.
Funded by the European Union. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or CINEA. Neither the European Union nor CINEA can be held responsible for them
The Institute for European Environmental Policy (IEEP) is an independent sustainability think tank with offices in Brussels. As a not-for-profit organisation with over 40 years of experience, we are committed to advancing impact-driven sustainability policy across the EU and the world.
Institute for European Environmental Policy - IEEP, Norrsken House Brussels, 72 Rue du Commerce, 1040, Brussels, Belgium, 022111097
