Brazil’s Lula says EU should ‘give up’ protectionism to reach Mercosur deal

4:00 am Thursday, June 22nd, 2023

By Catarina Demony

(Reuters) – Brazil’s President Luiz Inacio Lula da Silva said on Thursday the European Union should stop adopting a protectionist stance if it wants to reach a long-delayed trade deal with the Mercosur bloc.

The EU and the Mercosur bloc of Argentina, Brazil, Paraguay and Uruguay completed negotiations in 2019 but the deal has been on hold due to concerns about Amazon deforestation and Brazil’s commitment to climate change action.

Lula, who was elected last year, has promised to overhaul his country’s climate policy.

The Commission has proposed attaching an annex to the agreement to show commitments on deforestation and other areas of sustainability and is awaiting Mercosur’s response.

“The additional letter the EU sent to Mercosur is unacceptable because they punish any country that did not comply with the Paris Agreement,” Lula told a news conference on the final day of his trip to Italy. “Not even them (EU) complied with the Paris Agreement.

Lula said the Mercosur bloc was preparing its response and urged EU countries to be more “sensitive and humble”.

Lula will travel to France next and is expected to meet President Emmanuel Macron.

France has said it was waiting to see if Lula’s return to power will allow progress on climate and deforestation issues that remain red lines for Paris in any EU-Mercosur trade deal.

“I intend to talk to…Marcron because France is very tough on defending its agricultural interests…it’s wonderful they defend their agriculture, but they have to understand that others also have the right to defend theirs,” Lula said.

He added: “It is important everyone gives up their protectionism so that we can build the possibility of an agreement that improves the situation of the EU and South America.”

Earlier this month, the Commission said it would be unwise to renegotiate parts of its proposed free trade agreement with Brazil and other countries of the Mercosur bloc, given it took two decades to reach an initial deal.

Both Brazil and the European Commission hope to finalise the trade this by the end of the year.

(Reporting by Catarina Demony; Editing by Sharon Singleton)