E.U. Delays Mercosur Trade Deal With South America

The move by the European Parliament delays a push by the bloc to find new trading partners, as President Trump has threatened escalating U.S. tariffs.

The European Parliament voted on Wednesday to delay a major trade deal between the European Union and four South American countries, a setback to efforts to diversify trade relationships as President Trump threatens a new round of escalating U.S. tariffs on goods from several countries on the continent.

The European Union’s legislative arm voted by a slim margin to refer the pact with Brazil, Argentina, Paraguay and Uruguay, which form the trade bloc known as Mercosur, to the European Court of Justice to examine whether it is compatible with the bloc’s existing treaties.

Waiting for a ruling could delay the treaty’s implementation by as much as two years.

The Mercosur deal, which resulted after more than two decades of negotiations, had encountered bitter opposition from farmers and some environmentalists in Europe who argued that South American agricultural products would not meet European standards and unfairly compete with farmers at home.

Ursula von der Leyen, the president of the European Commission, the bloc’s executive arm, thought she had managed to assuage enough opponents to win approval. She was in Paraguay on Saturday to sign the treaty that would create one of the world’s largest free trade zones, connecting more than 700 million people.

“This comes at a time when E.U. producers and exporters urgently need access to new markets,” the commission said in a statement, noting that the delay undermined the bloc’s reputation as “a reliable and predictable trade partner.”

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