How EU Commission failed to stop Mercosur trade deal fiasco

STRASBOURG — Late on Tuesday night, the talk in Strasbourg’s bars and brasseries — packed with EU lawmakers and their aides — was that a decision on whether to freeze the EU-Mercosur trade deal would come down to just a few votes.

Even though a majority of European Parliament lawmakers have had their positions on Mercosur fixed for months, a few swing voters could delay ratification of the deal, which was heavily backed by European Commission President Ursula von der Leyen, by up to two years.

The Commission knew Mercosur was heading south for weeks, according to two Commission officials who were granted anonymity to speak freely. A concerted lobbying campaign to ensure that didn’t happen ultimately failed.

MEPs ultimately backed a resolution to seek an opinion from the Court of Justice of the EU on whether the texts of the agreement — with the Mercosur countries of Argentina, Brazil, Paraguay and Uruguay, and which was in the works for over 25 years — comply with the EU treaties. The motion was carried by a margin of 334 to 324 with 11 abstentions. The Parliament now cannot give its assent to the deal until the court has ruled, which can take between 18 and 24 months.

The suspension of the deal’s legislative approval sent shockwaves across Europe, especially as von der Leyen had hailed the agreement as a way to bolster EU trade amid turbulent relations with Washington.

On a granular level, the freezing of the Mercosur deal can be traced to a handful of MEPs — notably from Romania’s Socialists and Hungary’s center right — whose last-minute U-turns tipped the balance. But it was national politics that really crashed the party, carving deep fault lines in the Parliament’s political groups that will leave deep scars.

Mainstream political parties in the likes of Romania, Hungary, Spain, France and Poland are dealing with far-right and right-wing populist movements at home that have made Mercosur a central campaign issue, criticizing Brussels for a deal they claim harms European farmers, which in turn makes it difficult for their MEPs to openly support Mercosur in Europe.

“National everyday politics prevailed over the bigger picture, which the EU is trying to present since the start of this Commission,” Željana Zovko, vice-chair of the European People’s Party, told POLITICO. She said she was “totally upset” with those EPP members who had voted to freeze the Mercosur deal out of the “selfishness of national day-to-day politics and elections.”

A bitter taste

The centrist coalition that in 2024 supported a second term for von der Leyen — the EPP, the Socialists and Democrats and the liberals of Renew — all backed Mercosur, but many of their members did not. Across political parties, certain national delegations have been against the deal for months, if not years, including the Irish, the French and the Poles.

“We were expecting this result,” said a Commission official, granted anonymity to speak freely, adding that although the team of Trade Commissioner Maroš Šefčovič had planned for this outcome, it left a ” bitter aftertaste because the vote was really tight.”

“The narrative on free trade has over the years more and more been hijacked by the extremes, inciting fear in people by using false information, and that ultimately also resulted in the outcome of Wednesday’s vote,” Renew Europe top trade lawmaker Svenja Hahn told POLITICO.

Aware that the vote was likely to go down to the wire, the Commission for weeks calculated which MEPs would vote in favor of the deal in each main political group, and tried to get lawmakers to either “flip” sides or abstain, according to a third Commission official.

They devised strategies such as getting their peers to pressure them, and asking heads of government and commissioners to call MEPs, the official said.

Pro-Mercosur MEPs and group leaders also exerted a lot of pressure, especially EPP chair Manfred Weber and S&D boss Iratxe García.

“I know Manfred put a lot — a lot — of pressure on his various delegations,” said a senior Parliament official.

Turning on each other

The one surprise of Wednesday’s vote, according to four Socialist officials and the third Commission official, was the 10 Romanian Socialist lawmakers who, instead of abstaining, ultimately voted to take the Mercosur agreement to court after feeling heat from the far right at home.

“In S&D, Romanians and Greeks became more extremist because of agricultural protests only in the last weeks,” said a Socialist MEP, granted anonymity to speak about his peers. Another lawmaker lamented that Commission Executive Vice-President Roxana Mînzatu — a Socialist — had not lobbied her fellow Romanians “to help her friend Ursula.”

The Hungarian EPP members were also a wild card. Many expected their seven votes to be counted as abstentions, while others anticipated they would vote in favor of freezing Mercosur because the country goes to the polls in April.

Prime Minister Viktor Orbán has portrayed the Hungarian EPP party, Tisza, as a Brussels puppet, and ahead of the vote accused them of undermining farmers by supporting Mercosur.

Then there were the Spanish EPP lawmakers, who in the last few weeks had raised doubts about their previously strong support for the deal. They hardened their rhetoric on Mercosur in Madrid to fend off the far-right Vox ahead of three key regional elections in agricultural regions — though ultimately they voted against bringing Mercosur to court. The EPP leadership plans to obtain their support when the time comes to ratify the deal.

Spanish People’s Party leader Alberto Núñez Feijóo on Thursday came out publicly against German Chancellor Friedrich Merz’s call for the Mercosur agreement to be provisionally applied even though the Parliament had sent it to court. Merz’s position is shared by EPP chief Weber.

That sets Europe’s biggest party on a collision course, just a day after a heated meeting of all EPP lawmakers in which different national delegations traded accusations. One center-right official described the session as a “shitstorm.”

The fact the leaders of the Polish, French and Slovenian factions within the EPP voted against the party line was the “biggest disappointment,” the EPP’s Zovko said. The rebels “need to reflect on their own behavior,” added EPP lawmaker Herbert Dorfmann.

French and Irish lawmakers in the Renew Europe group were also scolded at a group meeting described by a person in the room as a “bloodbath.” Lawmakers blasted the party president, Valérie Hayer, from France, as well as the Irish first vice-president, Billy Kelleher, for voting against the group line, accusing them of “betraying” liberalism.

A major clash is also looming between Germany and France, with President Emmanuel Macron’s government having come out against any provisional implementation of the trade deal that would bypass the Parliament, labelling it a “democratic violation.”