Mercosur and EU to resume negotiations in October

Negotiators from the European Union and Mercosur — the trade alliance between Brazil, Argentina, Paraguay, and Uruguay — will convene in Brasília on October 3 and 4 in the hopes of making possible the ratification of a free-trade agreement between the two blocs, The Brazilian Report understands.

The two sides reached an agreement in 2019 but ratification of the deal has hit snag after snag. European countries with strong agricultural lobbies, led by France, have raised environmental concerns to block the deal — an argument that was heavily validated by the lack of deforestation controls in Brazil during the previous Jair Bolsonaro administration.

In 2022, Brazilians voted Mr. Bolsonaro out of office — and the new Luiz Inácio Lula da Silva administration has adopted bold environmental goals and committed to zeroing Amazon deforestation by the end of the decade. 

Still, the EU in March presented a side letter, a sort of annex to the proposed deal, with additional requests for environmental constraints. The draft rules would require voluntary environmental commitments made under the 2015 Paris Agreement to be enforced by sanctions.  

Brazi has adamantly opposed the side letter, which the government considers to be punitive and discriminatory. The Lula administration has also taken issue with a provision opening up Mercosur’s market of public purchases to EU bidders.

This week, President Santiago Peña of Paraguay added more pressure to getting the deal done quickly. He promised to halt talks around the free-trade deal if an agreement is not reached by December 6, when his country takes over Mercosur’s rotational presidency from Brazil.

• Read also: Failure to ratify the EU-Mercosur trade deal would be a lose-lose situation (May 2023)

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