The European Parliament’s decision to refer the EU-Mercosur free trade agreement (FTA) to the Court of Justice adds a further delay to one of the EU’s most important and long-running trade initiatives.  

Commenting on the vote, Malte Lohan, CEO of AmCham EU, said: ‘Today’s vote by the European Parliament to refer the EU-Mercosur agreement to the Court of Justice is a self-inflicted setback for Europe’s economic interests and geopolitical relevance at a moment when the EU can least afford it. 

After 25 years of negotiations, this should have been Europe stepping forward as a global trade leader and champion of win-win partnerships. It was an opportunity to strengthen Europe’s global position, diversify supply chains and open new opportunities in a fast-growing market of 284 million people. 

Instead, this vote has chosen - yet again - delay. 

Europe’s credibility as a trade powerhouse is now on the line. The EU must move decisively to get this agreement back on track.’ 

The EU-Mercosur FTA will deepen economic ties, reduce barriers to trade and strengthen long-term engagement with a key region. How this process now unfolds will be critical not only for the agreement itself, but also for confidence in the EU’s broader trade agenda. 

Today marks a historic milestone with the signing of the EU-Mercosur Trade Agreement, creating the biggest trading block in the world. European business – represented by more than 28 associations across a wide range of sectors – warmly welcomes this signature. It sends a strong and timely signal that the EU remains open and is committed to rules-based global trade. In a time of global uncertainty, this agreement is a key growth booster.

By opening access to over 270 million consumers via the elimination of trade barriers and the removal of tariffs on over 90% of EU exports, the agreement provides the thrust European companies need to export, invest, and grow, as well as to diversify their supply chains, sourcing essential products and raw materials from Mercosur. By 2040, according to DG Trade’s calculations, the agreement is expected to add 77.6 billion euros to the EU GDP, resulting in a 39% increase in EU exports to Mercosur.

With the agreement now signed, the ball is firmly in the court of the European Parliament in ensuring rapid ratification. We therefore call on Members of the European Parliament to give their consent and allow Europe’s engine of economic growth and prosperity to be switched on and move ahead decisively. After over 25 years of negotiations, we are finally in sight of the finish line. We cannot afford to wait any longer.

EU Member States’ decision to approve the EU-Mercosur free trade agreement is a major victory for the EU’s free trade agenda. For companies in the EU, the agreement promises to support deeper integration of value chains and facilitate access to a market of 284 million consumers. This will contribute to more resilient and diversified supply chains, including access to critical raw materials essential for the EU’s economic security and industrial growth.

AmCham EU praises the European Commission for its work with Member States to ensure the deal benefits all sectors of the EU economy. By concluding Mercosur’s first trade agreement with a major global partner, the EU demonstrates its commitment to open and rules-based trade. The European Parliament must now approve the agreement without delay, so that – after 25 years of negotiations – businesses and citizens can start benefiting from this deal.

Reacting to the news, Malte Lohan, CEO, AmCham EU, stressed the importance of the agreement: ‘The Council’s decision is a timely one. In today’s world, the EU needs to boost its economic competitiveness and maintain its free trade leadership. The EU-Mercosur agreement ticks both boxes’.

‘The business case is clear; the geopolitical case is clear. It is now the Parliament’s job to see the agreement across the finish line’, he added.

The European Council’s decision to postpone its vote on concluding the EU-Mercosur free trade agreement (FTA) is a missed strategic opportunity that threatens the EU’s credibility as a reliable partner. After more than 20 years of negotiations, the EU is once again delaying one of its most ambitious and strategic trade agreements.

The EU-Mercosur FTA’s economic benefits are clear. At a time when strengthening competitiveness, economic growth and partnerships should be paramount, the FTA provides access to a market of 284 million consumers – reducing tariff and non-tariff barriers and supporting integrated supply chains.

Beyond its economic benefits, the EU-Mercosur FTA is also an important geopolitical tool. It would anchor a long-term strategic partnership with a key region and reinforce the EU’s role as a credible advocate of rules-based trade. Amid heightened geopolitical rivalry, postponement weakens the EU’s standing and its ability to conclude ambitious FTAs elsewhere.

The EU cannot afford further delays. The EU-Mercosur FTA is vital for the region’s competitiveness, resilience and global credibility. The European Council must promptly return to this file and conclude this FTA in January.

On Tuesday, 25 and Wednesday, 26 November 2025, AmCham EU travelled to the European Parliament in Strasbourg, France. Over the two-day programme, the delegation met with nearly a dozen MEPs and advisors for an exchange on the future of EU trade policy. Discussions centred on the importance of transatlantic cooperation, the ratification of the EU-Mercosur agreement and the implementation of the EU-US Framework Agreement. Members underlined the need for an ambitious EU trade agenda that ensures market access, reduces tariff and non-tariff barriers and strengthens the resilience of European industry. The delegation also called for a swift adoption of the Commission’s proposal on tariff reduction on US industrial goods and reiterated the importance of a pragmatic, forward-looking transatlantic agenda that promotes predictability and economic security.

European policymakers are increasingly focused on strengthening the EU’s strategic autonomy, reducing strategic dependencies and building greater resilience across critical sectors. This drive is rooted in legitimate concerns about ensuring access to essential goods, increasing the diversity of supply chains and enhancing the EU’s ability to respond to geopolitical and economic challenges. As the EU seeks to address these challenges, its core objective should be to leverage its extensive partnerships and use smart incentives to support the bloc’s long-term competitiveness and security.

Lawmakers are actively considering ways that ‘Made in Europe’ criteria could support these objectives in virtually any process requiring clearance, approval or an auction. Global examples of domestic preference and non-price criteria demonstrate two things. First, if they are designed poorly, they could reduce competitiveness, simplification and resilience. However, they also demonstrate that if they are designed well, they can maximise the value of allies’ economic participation and improve the functioning of the processes they are applied to.

The US’s various ‘Buy America’ programmes provide a useful case study for assessing the risks of different ‘Made in Europe’ regimes. While US procurement and funding programmes with ‘Buy America’ provisions are generally open to foreign-headquartered participants (and actively encourage their participation), they also bring certain categories of risk that should be considered before bringing them to the EU.

If ‘Made in Europe’ effectively excludes firms headquartered in the US and other allied nations, including EU-based subsidiaries of US-headquartered firms, the EU risks introducing more complexity into European public procurement markets and funding programmes. This would ultimately diminish competition and the quality of products and services, while increasing costs and elevating trade tensions that may decreasing the market access of EU-headquartered companies abroad. At a time when the EU is facing urgent competitiveness challenges, policymakers should avoid pursing reactive security and resilience policies that would undermine the EU’s competitiveness goals.

However, if thoughtfully implemented, certain ‘Made in Europe’ regimes could leverage the EU’s Single Market and international partnerships to improve the EU’s competitiveness and resilience.