European commissioner sees “window” for EU-Mercosur deal

A former prime minister of Latvia, Mr. Dombrovskis is the EU authority leading the negotiations. He also serves as the executive vice president of the European Commission and met on Wednesday (23) in Brasília with Brazil’s Vice President Geraldo Alckmin, who additionally holds the position of minister of Development, Industry, Commerce, and Services.

Following the meeting to discuss the free trade agreement, Mr. Dombrovskis acknowledged the challenges, notably the traditional opposition from European farmers and environmental issues, but he highlighted that possible solutions are on the table. In this sense, adopting “compensatory measures,” such as a fund for potentially affected farmers, is a possibility if the agreement causes “disruptions” in the European market. However, Mr. Dombrovskis noted that he does not believe such measures will be necessary.

Should the agreement be concluded, it will still need to pass further stages, including the review of new rules by the European Council—negotiations on the agreement began in 1999.

Outside the EU and Mercosur, Mr. Dombrovskis noted concerns over potential import tariff hikes proposed by former U.S. President Donald Trump, should he win the presidential race. “We are ready to defend our economic interests, if necessary,” he said.

Below are the main excerpts from the interview:

Valor: Is it possible to conclude the EU-Mercosur free trade agreement negotiations by the end of the year?

Valdis Dombrovskis: We genuinely believe there is a window of opportunity to finalize negotiations by year-end. Of course, there are still matters we need to discuss and agree upon, as well as additional elements we are debating, such as the sustainability instrument focused on deforestation [a document reinforcing anti-deforestation efforts]. The rules under the Paris Agreement are also essential to the deal’s sustainability. We are also addressing topics on the economic front, and we have made progress; concluding the negotiations is feasible.

Valor: How do you plan to address the opposition from France and European farmers? Is a fund to compensate them a possibility?

Mr. Dombrovskis: The deal is basically what we agreed upon in 2019 [when both parties reached an initial agreement]. But there were obstacles in moving forward with ratification, with many criticisms. One was tied to policies adopted during [former President Jair] Bolsonaro administration, allowing deforestation to continue. This is where the idea of an additional sustainability instrument originated. There has been significant progress under President Luiz Inácio Lula da Silva administration. Deforestation has already been cut by half, with a goal [established with the United Nations] to achieve zero deforestation by 2030. Another criticism involved [Mercosur’s] access to the agricultural market [in Europe]. With the EU taking a cautious stance to balance expanded Mercosur access with our farmers’ interests, the deal will not create disruptions. Still, should disruptions arise, they can be addressed or compensated.