Brazil takes up Mercosur presidency aiming for deeper integration
Expanding trade, promoting energy transition, developing technology, fighting organized crime, and tackling social inequalities—these are the five priorities for the next Mercosur presidency, which Brazil will hold in the second half of this year.
The agendas were unveiled by Brazilian President Luiz Inácio Lula da Silva on Thursday (Jul. 3) during the 66th Mercosur Summit in Buenos Aires, Argentina, when he received the presidency of the South American bloc from Argentinian President Javier Milei.
The meeting brings together the leaders of member countries Argentina, Brazil, Paraguay, and Uruguay, as well as Bolivia, which is in the process of joining, plus associated countries, to discuss the bloc’s priority issues.
The Brazilian presidency will also seek to strengthen the common external tariff, incorporate the automotive and sugar sectors into the bloc’s trade regime, and strengthen the mechanisms for financing infrastructure and regional development.
In his speech, the Brazilian president advocated modernizing the payment system in local currencies to facilitate digital transactions.
He described Mercosur as a haven for the region’s nations in the face of an “unstable and threatening” world.
“Over more than three decades, we have built a house with solid foundations, capable of withstanding the force of the elements. We have managed to create a network of agreements that has been extended to the associated states. The whole of South America has become a free trade area based on clear and balanced rules,” he declared.
“Being in Mercosur protects us. Our common external tariff shields us from foreign trade wars. Our institutional strength accredits us to the world as reliable partners. We will face the challenge of safeguarding our space of autonomy in an increasingly polarized context,” he added.
Trade agreements
Brazil’s first priority at the head of Mercosur, as listed by President Lula, is to strengthen trade between the bloc’s countries and with external partners. The president’s goal is to finalize the South American bloc’s agreement with the European Union, considered the most important. Though already negotiated, the Mercosur–EU deal is now bring incorporated by the countries involved and is still being resisted, especially by France.
On Wednesday (Jul. 2), the conclusion of talks for a Mercosur deal with the European Free Trade Association—made up of Iceland, Liechtenstein, Norway, and Switzerland—was announced.
Mercosur also intends to negotiate specific accords with Canada and the United Arab Emirates, as well as working for new regional partners—such as Panama and the Dominican Republic—and updating its deals with Colombia and Ecuador.
President Lula also hopes to bring the Southern Cone countries closer to the Asian market.
“Our participation in global value chains will benefit from closer ties with Japan, China, Korea, India, Vietnam, and Indonesia,” he said, stressing the importance of adequate infrastructure for the circulation of goods and services. He mentioned the role of the South American Integration Routes and the Bi-oceanic Route projects in strengthening these connections.
During the next half year, under the Brazilian presidency, Mercosur is expected to launch the second edition of the Mercosur Structural Convergence Fund (FOCEM in the original Portuguese and Spanish acronym), a joint financing mechanism set up by the countries of the bloc for construction work and other initiatives to promote trade. In recent decades, the fund has made more than $1 billion in investments possible, especially in structural works in countries like Argentina and Paraguay.
Finally, the Brazilian leader advocated the reactivation of the Mercosur Business Forum, as well as greater support for small and medium-sized enterprises.
“You can’t build prosperity through big businesses alone,” he argued.
Climate change
Under the Brazilian presidency for the next six months, Mercosur should push for a green agenda to boost cooperation in sustainable trade.
President Lula said that tackling climate change and promoting the energy transition were priorities.
“The consequences of global warming are already being felt in the Southern Cone. The region suffers from droughts and floods that cause human losses, destruction of infrastructure, and crop failures. Reality is moving faster than the Paris Agreement, exposing the fallacy of climate denialism,” he warned.
“Brazil has taken on the responsibility of hosting COP30 [the 30th United Nations Climate Change Conference] at a time of serious turbulence for multilateralism. The support of Mercosur and the whole of South America will be essential,” he said.
Technological development
President Lula once again criticized the concentration of technology in the world, “in the hands of a small number of people and companies, based in an even smaller number of countries.”
He recalled that Brazil and Chile have formalized a partnership to create artificial intelligence models that reflect the cultural and linguistic realities of Latin America and expressed his wish to expand the initiative in Mercosur.
Bringing data centers to the region is a matter of digital sovereignty, he stated.
“This effort must be accompanied by the local development of computing capacities, respect for data protection, and investments to meet additional energy demands,” he went on to declare.
“The COVID-19 pandemic has exposed the vulnerability to which we are subjected due to the lack of access to vaccines and medicines. Brazil wants to make Mercosur a hub for health technologies, capable of meeting the needs of our people,” he added.
Organized crime
Upon receiving the bloc’s presidency, President Lula pledged to study Argentina’s proposal to create an agency against transnational organized crime.
“We won’t defeat these veritable crime multinationals without coordinated action. We need to invest in intelligence, stem the flow of arms, and choke off the resources that finance the crime industry,” he said.
Deepening cooperation against organized crime is a priority for Brazil, establishing initiatives that complement each other to gain regional scale, the president argued.
He mentioned the Tripartite Command of the Triple Border, a platform for combating financial crimes and trafficking in drugs, arms, and people, as well as the Center for International Police Cooperation in the Amazon, inaugurated in Manaus, with the participation of security forces from the nine Amazonian countries, to curb environmental crimes and other illicit activities.
