European Parliament blocks $100B EU-Latin America free trade agreement

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Just days after the EU inked a historic free trade deal with Brazil, Argentina, Paraguay and Uruguay, the European Parliament voted to send it to the Court of Justice , the EU's highest court, to rule on its legality. File photo by Julien Warnand/EPA-EFE 
 
 

Jan. 21 (UPI) -- European lawmakers narrowly voted Wednesday to refer a $100 billion free trade agreement with Latin American "Mercosur" countries to the EU Court of Justice in Luxembourg to rule on whether it is lawful, just days after it was signed.

The 334-324 vote by MEPs to send the deal to the court to determine its compatibility with EU treaties could push back implementation by months or years, impacting as many as 700 million people in the two free-trade blocs. 

However, the European Commission indicated it would forgo its power to allow the agreement to take interim effect until the court delivers its verdict due to the pushback likely from EU member states that oppose the deal, including France, Hungary and Poland.

A European Commission spokesperson said the executive branch regretted the decision and "would seek to convince lawmakers about the geostrategic importance of this trade deal," but said the matter would be on the agenda of an emergency meeting of EU leaders Thursday in Brussels, being called to discuss "developments in transatlantic relations." 

"In a time of geopolitical tensions, today's vote is regrettable and sends completely the wrong signals," MEP Jorgen Warborn told Swedish media.

MEPs who mounted the legal challenge expressed irritation at what they said was chicanery by Brussels to "prevent national parliaments [of EU member countries] from having their say" by ensuring the trade element only required the backing of the EU Council and EU Parliament.

That tactic could be illegal under EU law, they argued.

Signed in Asuncion on Saturday, the free-trade partnership between the 27-member-country EU and Brazil, Argentina, Paraguay and Uruguay is aimed at boosting two-way trade and investment while slashing tariffs, non-trade barriers and strengthening rules and standards.

Supporters also believe the deal -- two decades in the making -- presents a huge opportunity to strengthen the European project on the global stage at a time of uncertainty in Europe's relationship with the United States.

However, farmers, French ones in particular, oppose it on fears it will see their markets flooded by cut-price imports of food that does not have to be produced to the same standards they are required to meet. By Paul Godfrey, UPI