Lula administration signals another hurdle to Mercosur-EU deal

Agrarian Development Minister Paulo Teixeira on Monday criticized the terms of the Mercosur-European Union free-trade agreement for its potential impact on family agriculture, opening up a new front on the grievances of the Brazilian government with the proposed deal.

“I think this agreement needs to be discussed, given the very, let’s say, high and immediate demands that European countries are placing within this agreement,” Mr. Teixeira said at a government-sponsored event on family agriculture.

Opening up the market too quickly, he said, would threaten the sector’s strength.

An agreement on the Mercosur-EU deal was reached in 2019, but ratification remains elusive. EU countries such as France and Ireland, home to strong agricultural lobbies, have evoked environmental concerns to block the deal.

Mr. Teixeira did not fully explain the reason for his concerns. A joint statement issued last Thursday by Brazil and 16 other developing countries showed concerns over how “punitive and discriminatory” the new EU Deforestation Regulation, approved by the European Parliament in April, can be.

The Luiz Inácio Lula da Silva administration had not yet criticized the draft’s impact on agriculture. So far, it has focused its fire on the side letter on environmental commitments and the issue of government procurement — opening up Mercosur’s market of public purchases to EU bidders.

Earlier this year, European leaders 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. 

Furthermore, Lula has insisted that Brazil “will retain the power to conduct industrial development policies through the instrument of public procurements.” Ignacio Ybáñez, the EU’s top ambassador to Brazil, told The Brazilian Report back in July that the government procurement provision is “a small part” of the deal, and there is a “tiny” window of opportunity to get the deal signed before the end of this year.

• #europe
• #mercosur
• #trade