Lula da Silva reiterates that Mercosur-EU trade agreement is “not valid” and must be renegotiated

Former Brazilian President Luiz Inácio Lula da Silva (2003-2011) said the trade agreement between the European Union (EU) and Mercosur is “not valid” and must be renegotiated because it does not take into account his country’s interests.

Lula da Silva reiterated that there is no need to rush to negotiate a new agreement and reach a consensus, adding that it is necessary to adjust the basics of what is vital for Europe but also consider what is essential for the countries of South America.

The leader of the Workers’ Party (PT, left), which is the favorite in the October elections, said that the trade agreement with the EU in its current form would be fatal for Brazilian industry. He explained that the industrial sector once accounted for 30% of GDP and now only 11%.

Lula da Silva reiterated that Brazil and other countries (and he named Argentina) have the right to care for their industry, which is why he advocated for “a more civilized relationship where everyone can win.”

He also defended the right of Mercosur (Common Market of the South) countries to make government purchases, saying they are an important tool for implementing public policies, such as job creation: “Europe needs to understand that,” he said.

Lula expressed confidence that the scenario for a possible renegotiation of the agreement will be positive, since Europe is in a period of uncertainty and South America could be “a respite of calm and opportunity” for these countries.

The agreement between the EU and Mercosur was signed in June 2019, two decades after negotiations began. Still, it did not enter into force because member countries must ratify sites, and there are very different positions.

Currently, the agreement favors South American countries that export more agricultural products to Europe and, in return, allows Europe to export more industrial products to Mercosur countries, which could have a serious impact on local industries, especially in Brazil and Argentina, the most industrialized countries in the bloc.

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

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