The European Commission has announced that its trade agreement with the Mercosur bloc will provisionally enter into force on May 1, marking a crucial milestone for a pact that has divided European capitals and drawn fierce opposition from agricultural producers.

Brussels confirmed on March 23 it had sent a formal notification to Paraguay, which serves as legal guardian of Mercosur treaties, completing the final procedural step required for provisional application under the council decision approved in January.

The agreement will apply from May 1 between the EU and all four Mercosur countries – Argentina, Brazil, Paraguay and Uruguay – which have now completed their ratification procedures.

"Provisional application ensures the removal of tariffs on certain products as of day one, creating predictable rules for trade and investment," the commission said in a statement. "EU businesses, consumers and farmers can thus start reaping the benefits of the deal immediately, while sensitive sectors of the EU economy are fully protected by robust safeguards."

The announcement follows European Commission president Ursula von der Leyen's February decision to proceed with provisional implementation despite objections from the European Parliament, which referred the agreement to the EU's top court for a legal review shortly after it was signed in January.

The move triggered sharp rebukes from France, with President Emmanuel Macron condemning it as a "bad surprise" that showed disrespect to European lawmakers.

Germany and Spain, by contrast, welcomed the development, with German foreign minister Johann Wadephul calling the agreement "historic" and essential for European prosperity.

The deal, which took a quarter century to negotiate, creates one of the world's largest free trade zones encompassing over 700mn consumers and 30% of global GDP. It is designed to eliminate tariffs on up to 91 per cent of European goods entering Mercosur markets and 92% of levies on South American exports to the EU.

Brussels estimates the agreement will save European exporters more than €4bn annually in duty payments, with particular benefits for automotive, machinery, chemicals and pharmaceutical manufacturers. Germany's substantial automotive industry stands to gain significantly from the elimination of tariffs ranging from 14% to 35% on European exports to South America.

The pact was signed in Asunción on January 17, with von der Leyen and European Council president António Costa representing the EU alongside foreign ministers from the four Mercosur nations. Costa had framed the deal as a rejection of "isolationism, unilateralism and the use of trade as a geopolitical weapon".

However, European agricultural producers remain vehemently opposed, fearing they will be undercut by cheaper South American imports, particularly beef and poultry. Farmers have staged protests across the continent in recent months, echoing widespread agricultural mobilisation against the accord.

France led unsuccessful efforts to block the agreement before its signature, attempting to forge a blocking minority alongside Poland. However, the EU's approval process required only a simple majority, allowing Brussels to override objections from Paris and other sceptical member states.

The commission has insisted it has adequately addressed agricultural concerns through safeguards for EU producers, though critics argue these measures remain insufficient.

Major Mercosur exports to the EU include agricultural products, raw materials and minerals, whilst European manufacturers stand to benefit from reduced levies on machinery, chemicals, pharmaceuticals and transport equipment shipped to South America.

The provisional application allows businesses to benefit from reduced tariffs and streamlined customs procedures before the agreement formally enters into force, which requires the European Parliament's consent. The EU parliament's decision to seek a legal review from the Court of Justice reflects the political sensitivity surrounding the accord and ongoing concerns about its compatibility with EU environmental and agricultural standards.