Lula and EU top official reaffirm commitment to Mercosur-EU deal

European Commission President Ursula von der Leyen on Monday said she and Brazilian President Luiz Inácio Lula da Silva both intend to conclude the European Union-Mercosur free trade agreement by the end of this year.

“We both believe that it is now the time to conclude the EU-Mercosur agreement. We have the ambition, the two of us, to get it done as soon as possible, [at] the latest by the end of the year,” Ms. von der Leyen told the press in Brasília after a meeting with Lula.

Negotiations around the deal began in the late 1990s, but the two sides only reached an agreement in principle in 2019. EU members have since delayed a final draft as agricultural lobbies in countries such as France have groused about their South American competitors.

As The Brazilian Report showed back in May in our Brazil Daily newsletter, a delegation of European Parliament lawmakers visited Brasília to push the case for the agreement. Days later, Brazilian Foreign Minister Mauro Vieira told House members that signing the deal before the end of this year was indeed possible.

“Could the agreement be signed this year? It could. We are negotiating, we are preparing a counter-proposal fitting to the national interest,” Mr. Vieira said at a House Foreign Relations Committee hearing.

Spain will next month take over the rotating presidency of the Council of the European Union, which some EU lawmakers understand as an opportunity to push the deal forward.

Lula said that he exposed to Ms. von der Leyen his concerns with proposed government procurement rules on the free trade agreement. Brazil, Lula said, “will retain the power to conduct industrial development policies through the instrument of public procurement.” Ms. von der Leyen replied that she’s looking forward to the response from Mercosur members.

Additionally, Ms. von der Leyen announced that the EU will contribute EUR 20 million to the Amazon Fund, following on from pledges this year by the U.S. and the United Kingdom. “You brought Brazil back to where it belongs, as a major global player,” she told Lula.

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