Lula demands clarity from Europeans on Mercosur deal
President Luiz Inácio Lula da Silva met with European leaders on Sunday (Sep. 10) and reiterated that the agreement between Mercosur and the European Union (EU) must be balanced and allow for an ambitious trade agenda between the blocs. The meetings took place on the sidelines of the G20 Summit in New Delhi, India.
Lula met with European Commission President Ursula von der Leyen, European Council President Charles Michel, and French President Emmanuel Macron. During the talks, he discussed the issues holding up an outcome and demanded clarity about the possibility of a compact. In his opinion, the decision is more political than technical.
“Lula announced that Mercosur is ready to conclude the agreement as soon as possible, adding that he expects a clear stance from the Europeans,” a note from the Planalto presidential palace reads. “In the Brazilian president’s view, after 22 years of talks between the negotiators it makes no sense to continue to delay consensus. In his opinion, it is time for the leaders on both sides to decide politically to advance the agreement between the blocs,” the statement says.
The Brazilian president reaffirmed that Mercosur does not accept positions such as the additional letter that the EU made this year, including the possibility of sanctions over environmental issues. The European group wants to establish penalties for those who fail to comply with the terms of the Paris Agreement—the international treaty on climate change adopted in 2015.
In previous statements, Lula said the proposal is unacceptable, but, according to the official note, he is confident that “a balanced agreement that takes into account the needs of both sides” will be reached by the end of the year. Under Brazil’s leadership, Mercosur submitted a counter-proposal to the Europeans’ additional document a few days ago.
To Lula’s judgment, the proposal also disregards Brazil’s credentials on the matter. To the leaders, he cited the government’s work to slash deforestation in the Amazon and the initiative to bring together authorities from the region’s eight countries at the Amazon Summit in Belém, Pará state, in August.
Approved in 2019 after 20 years of negotiations, the Mercosur–EU deal needs to be ratified by the parliaments of all the nations in the two blocs in order to enter into force. The negotiation involves 31 countries.
Lula also reiterated that Brazil will not give up on government procurement, as he considers it an essential tool for the country’s re-industrialization. The proposed deal allows foreign suppliers of goods and services to be contracted in Brazil and to take part in a series of public tenders in the country.
On social media, Ursula von der Leyen agreed with the intention to find a consensual way forward. “The EU values its partnership with Brazil. We want to reenergise it. And we must find a path forward for EU-MERCOSUR,” she wrote.
Cultural ties
At the meeting between Lula and Macron, the two leaders agreed to repeat a joint initiative in 2025 to bring representatives of Brazilian culture to the European country and prominent French artists to perform in Brazil. The events should be similar to the Year of Brazil in France and the Year of France in Brazil, held in the 2000s.
Lula and Macron also discussed an agenda for cooperation in areas such as defense and the environment. The Brazilian leader reinforced his invitation to Macron to make his first official visit to Brazil, and heard from the European that this should materialize early in 2024.
Brazil and France signed a strategic partnership in 2006 to promote political dialog and economic and trade relations. The two countries also cooperate in the areas of defense, space, nuclear energy, and sustainable development. The partnership also covers education, science and technology, migration, and cross-border issues.
In 2022, bilateral trade amounted to $8.45 billion in goods.
Saudi Arabia
President Lula also spoke for the first time with Crown Prince and Prime Minister of Saudi Arabia Mohammed bin Salman. The Saudi representatives told Lula they plan to expand investment in Brazil, especially in oil and gas and green sources, as well as resuming a trade agenda that has been stalled in recent years.
It was also agreed that a delegation of Saudi investors and officials should visit Brazil soon in order to become familiar with the portfolio of projects in Brazil’s New Growth Acceleration Program (PAC) that are open to international investment. These will be discussed by the foreign ministries of both countries.
“According to President Lula, the growth of Saudi investments in Brazil is welcome and could be important in the transition to a more sustainable economy, with an emphasis on high-tech sectors, like the development of hybrid engines and also green hydrogen,” the note from the Planalto palace states.
Trade relations between the two nations have been on the rise year after year. In 2022, the volume of commerce totaled $8.2 billion.
During the conversation, the Brazilian president also welcomed Saudi Arabia as a new member of the Brics. The Arab nation is part of the group of six new members made official in August—along with Argentina, Egypt, the United Arab Emirates, Ethiopia, and Iran. Until then, the bloc of emerging countries consisted only of Brazil, Russia, India, China, and South Africa.
