Paraguay’s President Santiago Peña plans to stop EU trade talks. He disclosed his intentions before assuming Mercosur’s rotating presidency on December 6.
Brazil’s President, Luiz Inácio Lula da Silva, currently aims to finalize the deal. This commitment was made at a Mercosur summit in July 2023.
The talks between the EU and Mercosur have lasted for over two decades. A preliminary deal was signed in 2019.
Yet, new environmental clauses from the EU have stalled progress.
Brazil fears these could lead to sanctions. In September, both sides met to discuss Brazil’s counter-proposal to remove these clauses.
Peña’s announcement adds complexity to Brazil’s leadership efforts within Mercosur.
Brazil aims to finalize the deal but faces a lack of political will among South American members.
This raises questions about Peña’s position. Uruguayan analyst Nastasia Barceló questions whether it’s a collective or individual stance.
Both the Uruguayan government and diplomatic circles were surprised by Peña’s statement.
Argentine Foreign Minister Santiago Cafiero says to local media Mercosur remains a key tool for regional integration.
Barceló states the EU has been consistent in imposing higher standards, affecting Brazil more.
She adds Peña’s unilateral decision shows a lack of coordination in Mercosur. Nevertheless, she considers it unlikely for this move to disrupt the Mercosur agenda.
She also notes Argentina’s presidential election on December 10 could be a game-changer, especially if candidates Javier Milei or Patricia Bullrich win.
Background
In recent years, Mercosur has faced internal divisions and external pressures.
For instance, Brazil’s focus on fast-tracking the EU deal contrasts with Argentina’s more cautious approach.
Now, Paraguay adds another layer of complexity. This shows that Mercosur’s members are not on the same page, weakening the bloc’s negotiation power.
In addition, the EU’s stringent environmental clauses reflect a global trend towards sustainable trade.
This has put countries like Brazil on the defensive. If unresolved, this issue could hamper not just the EU-Mercosur deal, but also other international agreements.
Finally, the upcoming elections in Argentina could be pivotal. If a more protectionist leader emerges, it could tip the scales against a Mercosur-EU agreement.
This makes the next few months crucial for the future of the bloc and its international partnerships.