Lula Cautions Time Running Out for Mercosur-EU Agreement

Brazil’s President, Luiz Inácio Lula da Silva, commonly known as Lula, issued a warning about the Mercosur-European Union trade deal.

During a breakfast meeting with journalists on Friday, he stressed the pressing need for action.

He said that if he and European Union leader Pedro Sánchez didn’t finalize the deal, it might never happen.

Lula has already set a deadline for this significant trade agreement. He insists the deal must be complete by the end of the current year.

In a similar vein, Paraguay’s President, Santiago Peña, has his own conditions.

He stated that he won’t carry on the discussions when his country takes over Mercosur’s rotating presidency in December if there’s no agreement by then.

Back in 2019, the Mercosur/Mercosul and European Union blocs had agreed on a preliminary text for the trade deal.

However, completing the agreement has been continuously delayed. The European Union added more complexity by sending new terms in a letter this past March.

These terms included additional environmental commitments and penalties for non-compliance, which Brazil did not favorably receive.

Additionally, Lula expressed criticism of a new European Union anti-deforestation law.

This law forbids the import of products from areas that experienced deforestation after December 2020.

Now or Never

According to Lula, this new regulation significantly alters the balance of the originally agreed-upon deal.

Lula also raised concerns about the agreement’s clause on public procurement. This section allows European firms to participate in public tenders in Mercosur countries on equal terms.

Lula fears this could negatively impact small and medium-sized businesses in Brazil, creating unfair competition.

To conclude, Mercosur/Mercosul submitted a response to the European Union’s letter on September 13.

As of now, negotiations between the two regional blocs continue, but the future of this trade deal remains uncertain.

For the full picture, see our Mercosur EU Trade Deal: Complete Guide.