Lula Calls on EU to Finalize Mercosur Trade Deal by January

Brazilian President Luiz Inacio Lula da Silva has urged the European Union (EU) to demonstrate “courage” and finalize a trade agreement with the South American Mercosur bloc. The leaders of Argentina, Brazil, Paraguay, and Uruguay had anticipated reaching an agreement on Saturday that would establish the world’s largest free trade zone. Despite this hope, the deal faced significant resistance from farmers in countries such as France and Italy, leading to its postponement until January 2024.

During his opening speech at the Mercosur summit in Foz do Iguacu, Lula emphasized the need for political will among leaders to conclude negotiations that have been ongoing for over 26 years. “Without political will and courage on the part of leaders, it will not be possible to conclude negotiations that have dragged on for 26 years,” he stated. Lula further expressed that this agreement presents an opportunity to send a crucial message in defense of multilateralism and to strengthen the region’s strategic position in an increasingly competitive global environment.

Lula mentioned that he received a letter from EU leaders expressing confidence in the approval of the deal by January. An official from the European Commission, along with two diplomats who requested anonymity, indicated that the new anticipated signing date is January 12, 2024, in Paraguay. Nonetheless, Paraguayan Foreign Minister Ruben Ramirez noted that he and his Brazilian counterpart, Mauro Vieira, were not aware of any official communication regarding this timeline.

The proposed agreement would significantly enhance the EU’s ability to export vehicles, machinery, wines, and spirits to Latin America while simultaneously easing the entry of South American products, including meat, sugar, rice, honey, and soybeans, into European markets. Countries like Germany and Spain have expressed enthusiasm for a pact that could bolster their exports amidst ongoing global trade tensions.

Opposition to the deal has been fierce among European farmers, who fear being undercut by cheaper agricultural imports from Brazil and its neighbors. Recent protests in Brussels featured thousands of farmers demonstrating against the deal, with around 1,000 tractors rolling into the city. Protesters clashed with police, lighting fires and throwing objects, prompting a response with tear gas and water cannons.

The Mercosur summit commenced with ministerial discussions in Foz do Iguacu, a region renowned for its breathtaking waterfall system along the Argentina border. Alongside Lula, other leaders in attendance included Yamandu Orsi of Uruguay, Santiago Pena of Paraguay, and Javier Milei of Argentina. Jose Raul Mulino of Panama, which has associate member status, was also present. While Bolivia is the newest full member of Mercosur, it is not part of the current trade deal discussions.

The outcome of these negotiations remains crucial for both sides, as they seek to navigate the complexities of international trade and agricultural production. The stakes are high, not just for the economies involved, but also for the farmers and industries that will be impacted by these agreements.