Lula: Unilateral EU measures undermine Mercosur agreement

On Monday (Jul. 15), President Luiz Inácio Lula da Silva stated that European countries need to resolve their own contradictions for the Mercosur—European Union agreement to progress.

Lula made these statements after his meeting at the Planalto presidential palace with Italian President Sergio Mattarella, who is on a state visit to Brazil.

“I reiterated Brazil’s interest in quickly finalizing a balanced agreement with the European Union that benefits both regions,” said Lula. “I explained to the Italian president that progress depends on Europeans resolving their internal contradictions.”

Approved in 2019 after over 20 years of negotiation, the agreement faces resistance from countries like France, delaying its implementation. It covers tariff and regulatory issues, including services, public procurement, trade facilitation, technical barriers, sanitary and phytosanitary measures, and intellectual property.

Lula has repeatedly criticized European protectionism but remains committed to the Mercosur—EU agreement. Today, the Brazilian president reiterated that unilateral decisions could impede progress in the negotiations.

Lula stated, “Unilateral measures like the carbon tax imposed by the European Union could impact five of Brazil’s top ten exports to the Italian market. While reducing CO2 emissions is crucial, it should not rely on measures that unilaterally affect Brazilian producers and Italian consumers.”

Mattarella arrived in Brazil on Monday (14) with an agenda that includes visits to São Paulo, Rio de Janeiro, Salvador, and the state of Rio Grande do Sul, a significant hub of Italian immigrants in Brazil. This marks the first state visit by an Italian president to Brazil in 24 years.

Economy

Upgraded to the status of a strategic partnership in 2007, trade between the two countries currently stands at approximately $10 billion, with potential for growth. From January to June this year, Brazil imported $870.4 million more from Italy than it exported. Italy ranks 14th among destinations for Brazilian goods and 6th in terms of imports.

The following chart shows the most exported products shipped from Brazil to the EU in the first five months of 2024. The data featured below comes from DataLiner.

Top Exports to the EU | Jan-May 2024 | WTMT

Source: DataLiner (click here to request a demo)

Lula expressed his interest in diversifying the agenda and boosting Brazilian exports. “The upcoming resumption of the Brazil—Italy Council for Economic, Industrial, Financial Cooperation, and Development could greatly contribute to this,” said Lula, underscoring the Mercosur—EU Agreement’s significance in enhancing trade flows.

Source: Agência Brasil

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