Lula trashes EU side letter, says WTO “ended”

Lula and Emmanuel Macron Elysée Palace, in Paris. Photo: Ricardo Stuckert/PR

President Luiz Inácio Lula da Silva on Friday called an EU-proposed side letter to the free trade agreement with Mercosur a “threat,” said the World Trade Organization (WTO) has “ended,” and renewed calls for new international institutions and reform of those mostly designed by Western powers in the 1940s, such as the United Nations and the International Monetary Fund.

At the Summit for a New Global Financing Pact in Paris, Lula said trade agreements must be “fairer.”

“I’m dying to make a deal with the European Union. But it is not possible”, he said, referring to the proposed EU-Mercosur free trade agreement. Earlier this year, EU negotiators presented a side letter that allows for sanctions if countries fail to meet environmental commitments under the Paris Agreement. Mercosur members are expected to present a counter-proposal in the coming weeks, with the aim of signing the agreement by the end of the year.

Lula added that the World Trade Organization (WTO) has “ended.” The last round of WTO-led negotiations, the Doha Round, began in 2001 and was never completed.

Lula said that former U.S. President George W. Bush (2001-2009) backed away from the WTO, and his successor, Barack Obama (2009-2017), did not make it a priority either. “The WTO today does very little,” Lula added. Hence, protectionism and poverty returned.

Speaking alongside the host, French President Emmanuel Macron, the Brazilian president once again reiterated the need for developing countries to trade in currencies other than the U.S. dollar, a topic he promised to address at the upcoming BRICS summit in South Africa in September.

Lula had a working lunch with Mr. Macron after the summit. Later on Friday evening, Lula was scheduled to attend a dinner hosted by Mohammed bin Salman, the crown prince and prime minister of Saudi Arabia. Saudi Arabia had a close relationship with Lula’s predecessor, Jair Bolsonaro, including lavish gifts. However, the dinner was removed from Lula’s official schedule.

UPDATE: This post was updated to reflect changes to Lula’s official schedule.