Trade Perspectives©

Back

23 February 2026

Testing the legality: The European Parliament requests an Opinion from the EU’s Court of Justice regarding the EU-Mercosur Partnership Agreement

By Joanna Christy, Stella Nalwoga, and Paolo R. Vergano

Nearly 26 years after the initial start of trade negotiation, on 17 January 2026, the EU and Mercosur reached a political milestone with the signing of the EU-Mercosur Partnership Agreement (hereinafter, the EMPA). Yet, the signature of the agreement does not mark the end of the story as, on 21 January 2026, the European Parliament requested an Opinion from the Court of Justice of the European Union (hereinafter, CJEU) on the compatibility of certain elements of the EU-Mercosur Partnership Agreement with the EU treaties, effectively suspending the legislative process at the European Parliament, pending the judicial clarification. 

This article provides some background on the EU-Mercosur Partnership Agreement, analyses some of the legal questions submitted by the European Parliament to the CJEU, and details the next steps for the Agreement’s implementation.

Decades in the making

The negotiations for the EU-Mercosur Partnership Agreement were first launched in 2000, but negotiations were stalled due to, inter alia, disagreements over market access issues. Negotiations were relaunched in May 2016 and, on 6 December 2024, the EU and Mercosur announced that they had reached a political agreement on the EU-Mercosur Partnership Agreement. Negotiations for the EU-Mercosur Partnership Agreement were launched as a mixed framework agreement, encompassing policy areas that fall within the EU’s exclusive competence (e.g., trade in goods) and partly within the competence of EU Member States (e.g., public procurement).

In order to accelerate the implementation of the Agreement, on 3 September 2025, the European Commission split the Agreement into the broader EMPA and into an EU-only interim Trade Agreement (hereinafter, iTA), to allow the trade provisions to be applied more quickly after ratification by the EU and Mercosur countries, while the EMPA undergoes ratification by all EU Member States. On the EU side, the iTA only requires a qualified majority in the Council of the EU and consent by the European Parliament. 

On 9 January 2026, the Council of the EU adopted two decisions authorising the conclusion and signing of the EU-Mercosur Partnership Agreement and the Interim Trade Agreement. Under EU rules, the European Parliament must give its consent to trade agreements concluded under Article 218 of the Treaty on the Functioning of the European Union (hereinafter, TFEU). On 21 January 2026, the European Parliament requested an opinion from the CJEU on the compatibility of the EU-Mercosur Association Agreement with the EU treaties, raising a number of issues.

Key issues: Questions to be assessed by the CJEU

The request by the European Parliament was lodged pursuant to Article 218(11) of the TFEU through the adoption of a Resolution seeking an opinion from the Court of Justice on the compatibility with the Treaties of the proposed Partnership Agreement between the EU and Mercosur countries. The European Parliament requests the CJEU to assess the legality of certain aspects of the EU-Mercosur Partnership Agreement under EU law, namely: 1) The lawfulness of splitting the agreement; 2) The “rebalancing clause”; and 3) The impact on the precautionary principle allowing the adoption of sanitary and phytosanitary (SPS) measures without sufficient scientific evidence.

The request for an opinion from the CJEU suspends the procedure within the European Parliament to give its consent to both the EMPA and the iTA. The European Parliament’s legal service must now convert the resolution into a formal legal request, which may take at least several weeks. Procedures for opinions by the CJEU then typically take 16 to 25 months. For instance, Opinion 2/15 of the CJEU regarding certain aspects of the EU-Singapore FTA was issued within 22 months. 

The legality of splitting the Agreement

One of the areas of concerns of the European Parliament refers to the splitting of the Agreement into the EMPA and the iTA, which the European Parliament argues is against the Council of the EU’s negotiation mandate. Negotiations for the EU-Mercosur Partnership Agreement were launched as an Association Agreement, which traditionally referred to a single mixed agreement that requires ratification by the EU and all EU Member States.

The CJEU Opinion 2/15 on the EU-Singapore FTA concluded that the EU has discretion to structure or sequence agreements, as long as the content of the agreement stay within the legal competences conferred under the TFEU. Therefore, the central question for the CJEU will be whether the iTA is genuinely confined to matters falling within the EU’s exclusive competence under Article 3(1) of the TFEU or whether it is intertwined with elements that remain within shared or EU Member State competence.

The “rebalancing clause”

A central point of contention concerns the inclusion of a “rebalancing clause” provided under Article 21.4(b) of the Agreement, which allows a Party to seek compensation when a measure adopted by the other Party nullifies or substantially impairs a benefit under the Agreement “in a manner adversely affecting trade between the parties, whether or not such measure conflicts with the provisions of the Agreement”.

The European Parliament notes that, while a “rebalancing clause” can also be found under Article XXIII:1(b) of the General Agreement on Tariffs and Trade (GATT), it considers the provision under the EMPA to be more “wide reaching than existing ones in previous free trade agreements concluded by the EU and differs in scope and content” from Article XXIII:1(b) of the GATT. 

In this context, Article 26(1) of the WTO DSU clarifies that, even if a measure is found by a WTO panel to “nullify or impair benefits” under the Agreement, “there is no obligation to withdraw the measure” and a Panel would only recommend that the WTO Member concerned “make a mutually satisfactory adjustment”. However, under the iTA, if a dispute settlement panel has found “nullification” of “substantial impairment” under Article 21.4(b) thereof, the complaining Party may adopt countermeasures under Articles 21.20 and 21.21, and such countermeasures would be suspended only once the measure in question has been withdrawn or amended.

Therefore, the European Parliament is concerned that the “rebalancing clause” enables corrective action in response to a regulatory or policy development by the other Party, particularly in relation to adopting or enforcing legislation in sensitive areas, such as climate and environmental protection and higher levels of food safety, which are protected under the TFEU. The European Parliament is also concerned that the “rebalancing clause” could “incite the EU co-legislators to refrain from adopting such measures and put pressure on the Commission to withdraw, amend or halt the implementation of current legislation”, which could affect the EU’s regulatory sovereignty.

While the European Parliament raises concerns that the scope of the “rebalancing clause” could result in economic pressure on the EU when adopting new regulations, the legal structure of the “rebalancing clause” closely mirrors Article XXIII:1(b) of the GATT and Article 26(1) of the DSU. A WTO Panel found that Article XXIII:1(b) of the GATT “should be approached with caution and should remain an exceptional remedy”.

What’s next: Provisional application of the Interim Trade Agreement?

As noted above, the Opinion of the CJEU will likely only be handed down in 2027 or 2028. In view of this delay regarding the European Parliament’s consent, EU Member States and the European Commission have been floating the idea of a provisional application of the iTA. Article 23.2 of the iTA provides that the provisional application of the iTA between the EU and a signatory Mercosur State “shall begin on the first day of the second month following the date on which the European Union and that Signatory MERCOSUR State have notified each other of the completion of their respective internal procedures or ratification of the Agreement and confirm their agreement to provisionally apply the Agreement”.

Article 3 of the Council Decision on the signing of the EU-Mercosur Interim Trade Agreement allows the Agreement to be applied provisionally “from the first day of the second month” following the date that a Mercosur signatory has completed the respective internal procedures for provisional application and notified the EU of its agreement to apply the iTA on a provisional basis, with the date of provisional application subsequently published in the EU’s Official Journal. This is in line with Article 218(5) of the TFEU, which provides that the Council of the EU, “on a proposal by the negotiator, shall adopt a decision authorising the signing of the agreement and, if necessary, its provisional application before entry into force”. Various Mercosur countries have already begun their respective ratification processes. For instance, Brazil expects to complete its ratification by June 2026, while Argentina, Paraguay, and Uruguay have indicated possible ratification by April 2026. 

The provisional application of the iTA would offer an interim solution, allowing the trade pillar of the broader EMPA to be applied, pending judicial clarification of the European Parliament’s concerns.

For any additional information or legal advice on this matter, please contact Paolo R. Vergano 

Will 10 cents make a difference? Singapore’s Beverage Container Return Scheme will soon enter into force

By Imelda Jo Anastasya, Pattranit Chantaplaboon, and Ignacio Carreño García

On 1 April 2026, Singapore’s Beverage Container Return Scheme (hereinafter, Return Scheme) will enter into force. The Return Scheme will require pre-packaged beverages in plastic and metal containers supplied in Singapore to display a deposit mark, indicating that a deposit of Singapore Dollar (hereinafter, SGD) 0.10 has been paid, along with a readable barcode to enable their return for recycling at designated places. The Scheme aims to “increase the recycling rate of beverage containers and reduce the amount of waste disposed of as well as carbon emissions” and to “raise consumer awareness on the importance of recycling and encourage good recycling practices”.

This article reviews Singapore’s new Return Scheme, compares it with deposit return schemes in the EU, and analyses its commercial implications.

Putting a cap on waste: Development of the Return Scheme

In 2019, the #RecycleRight Citizens’ Workgroup, a citizen-filled workgroup initiated by Singapore’s Ministry of Sustainability and the Environment and Singapore’s National Environment Agency (hereinafter, NEA), proposed the introduction of a deposit return scheme in Singapore to increase household recycling rates and reduce contamination in recycling bins. Notably, Singapore’s household domestic recycling rates had been consistently low, ranging from 19% to 22% between 2012 and 2018.

Since 2020, the NEA has consulted various stakeholders to co-develop a scheme tailored to Singapore’s local context. This process included, inter alia, a public consultation held in 2022, which focused on the types of beverage containers to be covered, the appropriate deposit amount, and the locations of the return points. The feedback indicated a strong support for including plastic bottles and metal cans, for setting the deposit at SGD 0.10 or higher, and for locating the return points in common residential areas (e.g., carparks) and large supermarkets. 

On 29 July 2024, the NEA finalised the Return Scheme and appointed BCRS Ltd., a non-profit company formed by a consortium of beverage producers, as the licensed Scheme Operator, responsible for collecting, sorting, and recycling eligible beverage containers, as well as establishing and operating the return points.

From purchase to return: Operation of the Return Scheme

The Return Scheme is part of the implementation of Singapore’s Resource Sustainability (Amendment) Act 2023, which entered into force on 12 July 2024 and establishes obligations relating to the collection and treatment of waste. Sections 23P and 23Q of the Act require beverage containers to display a deposit mark and barcode, and require that a deposit be collected for each marked product.

The Return Scheme applies only to pre-packaged beverages in plastic and metal containers (e.g., cans, plastic bottles), excluding glass bottles, cartons, and freshly prepared beverages and foods sold on-site or foods supplied for special medical purposes. Freshly prepared beverages are excluded on the basis that they represent “small market shares and typically do not bear barcodes that are essential to facilitate the refund of deposit”, while foods supplied for special medical purposes are excluded as they are “typically used under medical supervision and consumed in hospitals, other healthcare settings, or in the patients’ homes”, making it more difficult for these containers to be returned at designated return points.

The Return Scheme will operate in three stages. First, producers of pre-packaged beverages must pay a deposit of SGD 0.10 to BCRS Ltd. for each beverage container that is affixed with the scheme’s deposit mark and barcode. Second, retailers must pay the deposit to producers in order to sell pre-packaged beverages to consumers, who in turn purchase the drinks by paying both the retail price and the deposit at the point of purchase. Finally, consumers may return empty beverage containers bearing the scheme’s deposit mark in designated return points to obtain a refund of the deposit. This mechanism is intended to create a financial incentive for consumers to return beverage containers for recycling rather than to dispose of them as waste.

A step forward for deposit return schemes in ASEAN? Lessons from the EU

Singapore’s Return Scheme marks the first mandatory nationwide deposit return scheme to be introduced by a Member State of the Association of Southeast Asian Nations (hereinafter, ASEAN). Although smaller-scale return schemes have been implemented in certain ASEAN Member States, they are generally voluntary and geographically limited in scope. For instance, in Bandung, Indonesia, several sustainability-focused skincare and personal care brands participated in Closing the Loop: Enabling Sustainable Plastic Recycling through a Digital Return System (DRS), a pilot initiative under which participating brands set up in-store collection points for consumers to return used personal care bottles. In Thailand, reverse vending machines allow individuals to exchange plastic water bottles for cash. However, such machines are still predominantly located in the country’s Central Region around the capital Bangkok.

In other regions, such as in the EU, deposit return schemes have already been implemented for years, for example in Denmark, Germany, the Netherlands, and Romania. These schemes operate within the framework of Directive (EU) 2019/904 of the European Parliament and of the Council of 5 June 2019 on the reduction of the impact of certain plastic products on the environment (hereinafter, SUP Directive), which aims at reducing marine litter coming from most common single-use plastic (hereinafter, SUP) products found on European beaches, and Regulation (EU) 2025/40 of the European Parliament and of the Council of 19 December 2024 on packaging and packaging waste (hereinafter, PPWR), which aims at preventing packaging waste and to increase the re-use and recycling of plastic packaging.

Under Article 9 of the SUP Directive, EU Member States must ensure the separate collection of specified amounts of SUP beverage containers of up to three litres. To achieve this objective, EU Member States “may, inter alia, establish deposit-refund schemes”, meaning that such schemes are optional to achieve the objectives of the Directive. In contrast, the PPWR will make deposit-return systems mandatory for SUP and metal beverage containers of up to three litres by 1 January 2029, requiring all EU Member States to operate such systems. 

According to a study by the Association of Cities and Regions for Sustainable Resource Management, deposit return schemes in the EU have proven to be the most effective measure in reducing packaging waste and increasing recycling, achieving high return rates for designated containers. Should Singapore’s Return Scheme prove successful, it may encourage other ASEAN Member States seeking to strengthen their domestic waste management and recycling policies to adopt similar systems, complementing the other sustainability efforts within the region.

Implications for businesses

The Return Scheme provides for a transition period from 1 April to 30 September 2026, during which products without the deposit mark may continue to be sold in stores. All producers of pre-packaged beverages in plastic and metal containers sold in Singapore must affix the Return Scheme’s deposit mark and barcode before the full implementation date of 1 October 2026. Non-compliance may result in a fine of up to SGD 10,000 and/or imprisonment for up to three months. Therefore, beverage business operators and importers should ensure that all covered products placed on the market in Singapore carry the required mark and barcode.

For any additional information or legal advice on this matter, please contact Ignacio Carreño Garcia

Food business operators must comply with stricter EU microbiological criteria for the bacterium Listeria monocytogenes in food as of 1 July 2026 

By Amanda Carlota, Ignacio Carreño García, and Tobias Dolle

As of 1 July 2026, Commission Regulation (EU) 2024/2895 of 20 November 2024 amending Regulation (EC) No 2073/2005 as regards Listeria monocytogenes updates the EU’s microbiological criteria for Listeria monocytogenes in food, notably in ready‑to‑eat (hereinafter, RTE) foods, in order to address rising listeriosis cases and improve consumer protection across the food chain.

To help food business operators (hereinafter, FBOs) prepare for the new rules, on 15 December 2025, the European Commission (hereinafter, Commission) published updated Guidance on Listeria monocytogenes monitoring and shelf-life studies for ready-to-eat foods under Commission Regulation (EC) No 2073/2005. This article discusses the new rules and the Commission’s guidance.

The bacterium Listeria monocytogenes

Listeria monocytogenes (hereinafter, Lm) is a bacterium that can cause severe illness in humans, primarily through contaminated food. Its infection (listeriosis) poses a particularly high risk to vulnerable populations, including infants, pregnant women, individuals over 65, and immunocompromised persons (e.g., cancer patients and transplant recipients). Although no absolute safe threshold exists, for healthy individuals, scientific consensus generally considers an Lm concentration not exceeding 100 colony-forming units per gram (cfu/g) during a food product’s shelf-life to present a low health risk.

Because infections caused by Lm have a high mortality rate of 20 to 30% according to the World Health Organization, and because Lm can grow even at refrigeration temperatures, stronger safety criteria were deemed necessary. In its latest report on infectious diseases that are naturally transmissible from animals to humans (i.e., zoonoses) of 9 December 2025, the European Food Safety Authority (hereinafter, EFSA) observed that, in 2024, Lm was the zoonotic disease with the highest percentage of hospitalisations and deaths in the EU. 

Lm is a major cause of food recalls. On 12 February 2026, the German Federal Office of Consumer Protection and Food Safety (Bundesamt für Verbraucherschutz und Lebensmittelsicherheit, BVL) published annual recall statistics for 2025 in Germany. In 2025, there were 323 recalls for foodstuffs and, in one third of the cases, pathogens were the reason for the recall. Lm was the food pathogen that led to the highest number of recalls, with 43 reports, followed by salmonella with 27. The BVL states that, in previous years, salmonella had caused the most food recalls, but that, since 2024, Lm had topped the list. 

According to the Commission’s Guidance Document on Listeria monocytogenes from 2016, Lm is “frequently present in the environment”, such as in soil, vegetation, and animal faeces, and can also be found in raw food and food derived therefrom. This “ubiquitous occurrence” of Lm, combined with its ability to “survive and even grow in difficult environments” makes Lm a “significant challenge” when producing RTE foods. For instance, studies show a persistence of Lm on both raw and dry-roasted nuts at various temperatures. While salmonella is more commonly associated with recent, large-scale recalls in 2025 and 2026, Listeria remains a significant risk for food safety, requiring stringent decontamination.

Stricter requirements for food business operators

In the EU, Commission Regulation (EC) No 2073/2005 on microbiological criteria for foodstuffs lays down the microbiological criteria for foodstuffs and defines measures that FBOs must take at each stage of food production, processing and distribution. Annex I to Regulation (EC) No 2073/2005 defines microbiological limits for certain micro-organisms, such as Lm, Salmonella, and E. coli, in foodstuffs. Commission Regulation (EU) 2024/2895 amends this Annex by modifying the food safety criteria for Lm in RTE foods. RTE foods are defined in Article 2(g) of Regulation (EC) No 2073/2005 as “food intended by the producer or the manufacturer for direct human consumption without the need for cooking or other processing effective to eliminate or reduce to an acceptable level micro-organisms of concern”. 

For RTE foods that are able to support the growth of Lm, other than those intended for infants and for special medical purposes, the current rules under Regulation (EC) No 2073/2005 require that the presence of Lm is “not detected in 25 g” of the food concerned “before the food has left the immediate control” of the food business operator, who has produced it, where that food business operator is not able to demonstrate, to the satisfaction of the competent authority, that the level of Lm would not exceed the limit of 100 cfu/g throughout the shelf-life of the food. Under the new rules, the requirement that the presence of Lm is “not detected in 25 g” of the food concerned now applies throughout its shelf-life, significantly raising compliance obligations of FBOs. FBOs must now demonstrate with scientific evidence (i.e., shelf-life studies in accordance with Article 3(2) of and Annex II to Regulation (EC) No 2073/2005) that their RTE food products comply with this limit throughout their product’s shelf-life, strengthening accountability across production, storage, and distribution stages.

At the international level, the Codex Alimentarius Commission established Guidelines on the Application of General Principles of Food Hygiene to the Control of Listeria Monocytogenes in Foods. The Codex Guidelines set the following microbiological criterion for Lm: “Absence in 25 g (< 0.04 cfu/g)” for ready-to-eat foods “from the end of manufacture or port of entry (for imported products)” in which growth of Lm can occur. Under Commission Regulation (EC) No 2024/2895, the requirement that the presence of Lm is “not detected in 25 g” of the food concerned applies throughout its shelf-life, which appears to be stricter than the Codex Guidelines. The Codex Alimentarius Commission has also established general Principles and Guidelines for the Establishment and Application of Microbiological Criteria Related to Foods, in which it recommends microbiological criteria, which national governments may “choose to adopt” into their national systems or use “as a starting point for addressing their intended public health goals”. 

Update of the Guidance Document on Listeria monocytogenes

On 15 December 2025, the Commission published an updated Guidance Document on Listeria monocytogenes monitoring and shelf-life studies for ready-to-eat foods under Commission Regulation (EC) No 2073/2005. The document is primarily directed at FBOs producing RTE foods and conducting related Lm shelf-life studies. The document guides FBOs to: 1) Demonstrate compliance with the legal microbiological criteria until the end of shelf-life; 2) Select appropriate approaches for determining safe shelf-life with respect to Lm; and 3) Classify products based on whether they can or cannot support Lm growth.

The Guidance emphasises a risk-based, science-supported approach for determining and validating the shelf-life of RTE foods with regard to Lm. FBOs must combine product knowledge, environmental monitoring, and validated scientific tools (e.g., predictive models, challenge tests) to ensure food safety from production to consumption. The Guidance can also assist competent authorities conducting official controls on these FBOs and serve as a resource for third parties involved in developing Lm shelf-life studies. 

Urgent action for compliance needed

Regulation (EU) 2024/2895 significantly tightens the microbiological criteria for Listeria monocytogenes across the entire food chain in the EU. The key change of requiring that Lm is “not detected in 25 g” of growth‑supporting RTE foods throughout shelf life significantly raises compliance obligations for FBOs, but is intended to reduce severe foodborne illness across vulnerable EU populations. FBOs that produce covered RTE foods are advised to consult Regulation (EU) 2024/2895 and the European Commission’s Guidance to ensure that they are equipped to comply with the new rules ahead of 1 July 2026. 

For any additional information or legal advice on this matter, please contact Ignacio Carreño Garcia

Recently adopted EU legislation

Trade Remedies

Customs Law

Food Law

Imelda Jo Anastasya, Amanda Carlota, Ignacio Carreño García, Pattranit Chantaplaboon, Joanna Christy, Tobias Dolle, Alya Mahira, Stella Nalwoga, and Paolo R. Vergano contributed to this issue.

Follow us on Bluesky @fratinivergano.bsky.social

To subscribe to Trade Perspectives©, please click here. To unsubscribe, please click here.