The European Parliament has stalled the EU's trade agreement with Mercosur by voting to submit the deal to the bloc's highest court for legal review that could delay ratification by more than a year.

Lawmakers backed the proposal by a razor-thin margin on January 21, with 334 MEPs supporting the referral, 324 opposing and 11 abstaining. The decision suspends the parliamentary approval process and threatens to undermine momentum for an accord that Brussels had positioned as crucial to Europe's economic security amid trade tensions with Washington and overreliance on Chinese supply chains.

The vote came as thousands of farmers surrounded the European Parliament in Strasbourg with tractors, protesting against what they view as an influx of cheaper South American agricultural products that could undercut domestic producers. Clashes with police erupted during demonstrations that began on January 20 and continued through today.

The Court of Justice will now examine whether the agreement complies with EU treaties, a review process that generally spans 18 to 24 months. Critics of the deal, led by French lawmakers, argue that the European Commission acted unlawfully by splitting the agreement into separate components to circumvent national parliamentary oversight.

French Foreign Minister Jean-Noël Barrot praised the outcome in a social media post. "France takes responsibility for saying no when it has to, and history often proves it right. The fight continues," he wrote.

The narrow vote exposed deep fractures within the parliament's political groups. According to Euronews, Renew Europe, the Greens, and the Left promoted the referral alongside the far-right Patriots for Europe group, whose president Jordan Bardella backed an initiative originating from the leftist camp. The legacy centre-right European People's Party and centre-left Socialists and Democrats defended the deal, though some members broke ranks. The right-wing European Conservatives and Reformists allowed a free vote, resulting in splits along national lines.

The parliamentary resolution challenges two key aspects of the agreement's structure. Lawmakers contend that separating trade provisions for EU-level approval whilst leaving other components subject to national ratification may violate treaty requirements for member state involvement in major international agreements.

The motion also targets what critics call a "rebalancing mechanism" embedded in the deal, which would permit Mercosur countries to impose compensatory measures if future EU legislation reduces their export access to European markets. Opponents warn this provision could constrain Brussels' ability to enact stricter environmental or food safety standards.

"Today, we won a first victory on Mercosur and showed our support to farmers. It was our responsibility as legislators to check the legality of the agreement," French Green MEP Majdouline Sbai, who initiated the motion, told Euractiv.

The European Commission expressed disappointment with the outcome. A deputy spokesperson said the decision came at a time "when the EU must deliver on its diversification agenda and demonstrate that it remains a reliable and predictable trade partner".

Despite the referral, the Commission retains technical authority to apply the agreement provisionally whilst the court examines its legality, provided member states endorse such action. Commission officials indicated the matter would be discussed at an extraordinary summit of EU leaders on January 22 before any decisions are taken.

However, proceeding with provisional application would risk straining relations between EU institutions. MEPs told reporters they had received assurances from Trade Commissioner Maroš Šefčovič that the Commission would not provisionally implement the deal without first securing parliamentary approval through a vote.

German Chancellor Friedrich Merz criticised the parliament's decision as "regrettable" and argued it "misjudges the geopolitical situation". Writing on social media, Merz said: "We are convinced of the legality of the agreement. No further delays. The agreement must now be applied provisionally."

The divide reflects broader tensions over the accord's merits. Supporters, including Germany and Spain, stress the deal's importance for accessing South American critical minerals essential to Europe's energy transition whilst reducing dependence on Chinese processing. They also point to opportunities for European automotive and machinery exporters facing headwinds from US tariffs.

Opponents, particularly from France, Ireland and Poland, argue the agreement threatens European farmers with competition from lower-cost South American beef, poultry and sugar produced under less stringent environmental and welfare standards.

The EU-Mercosur agreement, signed on January 17 in the Paraguayan capital of Asunción, would create one of the world's largest free trade zones covering more than 700mn people. The pact progressively axes over 90% of bilateral tariffs between the EU's 27 member states and Mercosur members Argentina, Brazil, Paraguay and Uruguay.

European officials had framed the deal as a geopolitical counterweight to US protectionism and Chinese economic influence in Latin America, securing preferential access to lithium, niobium and other materials crucial for battery production and renewable energy technologies.

The court referral introduces substantial uncertainty into the ratification timeline. Even if judges ultimately validate the agreement's legal structure, the delay provides additional time for opponents to mobilise resistance. The European Parliament would retain authority to reject the deal outright during any final ratification vote, regardless of the court's findings.

Brazil's government, which championed the agreement after decades of fraught negotiations, has expressed frustration with European delays. The accord still requires approval from legislatures in all four Mercosur member states, where ratification is considered virtually certain given broad political support.