The scheduled face-to-face meeting between Mercosur and the European Union (EU) negotiators in Buenos Aires, Argentina, has been postponed.
The deferral is a tactical move by Brazil to allot more time for a counterproposal concerning the government procurement aspect of the agreement.
Although there’s potential for a virtual meeting, it may lack the influence of an in-person event.
The preliminary agreement in 2019, finalized by the administration of President Jair Bolsonaro, promised comprehensive access to Mercosur’s government purchases for Europeans.
However, President Luiz Inácio Lula da Silva expresses concerns about possible detrimental impacts on domestic industries and seeks a review, despite facing opposition.
The EU introduced new environmental obligations in March, with a potential for sanctions in case of non-adherence.
Brazil responds that it would only accept these amendments if the EU concedes in governmental purchases, but no finalized counterproposal has been offered.
Lula criticizes the EU’s demands and insists on the preservation of access for small and medium enterprises, broadening the exclusion scope for healthcare purchases, and expanding compensations such as technological off-sets in Mercosur’s counterproposal.
This disagreement is expected to be a significant discussion point during Lula’s meeting with French President Emmanuel Macron later this week in Paris.
Despite the continued official optimism, ambassadors from European nations believe the chances of signing the free trade agreement have decreased.
For the full picture, see our Mercosur EU Trade Deal: Complete Guide.
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