Uruguay Is The First Country To Ratify The EU-Mercosur Deal

(MENAFN- The Rio Times) Key Points - Uruguay's Chamber of Deputies approved the EU-Mercosur agreement 91 to 2 on Thursday, completing ratification after the Senate passed it the day before. It is the first country on either side to formally ratify the deal. - The agreement, signed January 17 after 25 years of negotiations, would create the world's largest free trade zone covering over 700 million people and more than €111 billion ($131 billion) in annual bilateral trade. - The deal still faces a major obstacle in Europe, where the European Parliament has asked the EU Court of Justice to rule on its compatibility with EU treaties - a process that could take two years.

Uruguay, the smallest economy in Mercosur, has become the first country to formally ratify the trade agreement that took a quarter century to negotiate. Whether anyone on the European side will follow anytime soon is another question entirely.

The Vote

The Chamber of Deputies approved the EU-Mercosur agreement on Thursday with 91 votes in favor and two against. The Senate had given its approval the day before. The ruling Frente Amplio and the main opposition parties all voted in favor. Only the small Identidad Soberana party opposed the deal.

The near-unanimity reflects something unusual in Latin American politics: five successive governments of different ideologies were involved in negotiating this agreement over its 25-year lifespan, making it politically difficult for any party to reject something it helped shape.

Where the Other Countries Stand

Argentina's lower house approved the deal on February 13, but it still needs a Senate vote. Brazil's President Lula sent the text to Congress on February 2, with a lower house vote expected by late February. Paraguay, which hosted the signing in Asunción on January 17, is briefing its Congress but has not yet voted.

All four Mercosur members are expected to complete ratification before midyear. The race to go first was partly symbolic - a signal to Brussels that South America is serious about implementation.

Europe's Bottleneck

The bigger uncertainty lies across the Atlantic. When EU governments approved the agreement on January 9, five countries voted against it: France, Ireland, Austria, Hungary, and Poland. On January 21, the European Parliament voted by a narrow margin of 334 to 324 to ask the EU Court of Justice whether the deal is compatible with EU treaties. That legal review could take up to two years, effectively freezing full parliamentary ratification in Europe.

European Commission President Ursula von der Leyen has said Brussels is ready to provisionally apply the trade provisions while the court deliberates. The interim trade agreement, which covers tariff reductions and investment rules, falls under EU-level competence and does not require ratification by individual member states.

What the Deal Covers

The agreement would eliminate or reduce tariffs on over 90% of bilateral trade, saving EU exporters an estimated €4 billion ($4.7 billion) per year. It covers agriculture, automotive, pharmaceuticals, government procurement, and services. South America holds 56.7% of the world's lithium reserves, 36.3% of its copper, and 94.1% of its niobium - minerals essential to Europe's green and digital transitions.

Uruguay ratified in two days. Europe has been debating for 25 years and counting. The smallest Mercosur partner has done its part. Now it waits for everyone else to finish theirs.

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