Mercosur-EU trade deal expected in December

The Brazilian government believes the free trade agreement between the European Union and Mercosur will be announced during the South American bloc’s summit in December. An announcement at the G20 meetings, which end this Tuesday (19) in Rio de Janeiro, is no longer expected, despite initial plans from both sides. On Monday, German Chancellor Olaf Scholz also called for the agreement to be finalized soon.

Speaking to Valor, Agriculture Minister Carlos Fávaro said the deal between the two blocs is expected to be unveiled during the Mercosur summit scheduled for December 5-6 in Uruguay. France remains the primary obstacle, mainly due to potential negative impacts on its agricultural sector.

On Monday, French farmers staged new protests against the proposals under negotiation. However, during a press conference at the G20 meetings, Mr. Fávaro said, “Even with resistance, they [France] will end up facing pressure.”

Mr. Fávaro said this pressure will come “even from the [European] bloc itself, which is interested in formalizing the agreement.” Meanwhile, internal discussions within Mercosur, such as “questions raised by Paraguay,” have been addressed and resolved by President Lula.

Mr. Fávaro noted that “the progress is very encouraging for reaching a good outcome,” adding, “We have never been so close to this agreement.”

Another Brazilian government official involved in the negotiations predicted a final round of talks next week, during which the agreement could be finalized and announced in December at the South American bloc’s summit in Uruguay.

Chancellor Scholz, speaking at a G20 press conference, emphasized the urgency of concluding the deal. He criticized the EU’s current negotiation approach, stating, “We need to abandon the principles and methods by which agreements have been negotiated [in the EU] so far.”

“Trade agreements were delegated to the European Union by the European states, not to result in fewer agreements but in more,” Mr. Scholz said, advocating for changes that would enable more “exclusive” deals for the EU. “I am an explicit supporter of the so-called exclusive EU agreements,” the German chancellor added.

On Sunday, President Lula and European Commission President Ursula von der Leyen discussed the agreement during a bilateral meeting in Rio de Janeiro. Following the meeting, Ms. von der Leyen wrote on X that the deal has “great economic and strategic importance” for both sides.

In an interview with Valor in October, European Trade Commissioner Valdis Dombrovskis said the EU and Mercosur have “a window of opportunity to conclude negotiations by the end of the year.” Mr. Dombrovskis is the European official leading the process. President Lula has echoed similar sentiments, saying in September that both sides would “finalize the deal this year, God willing.”

“We continued discussions on efforts toward the Mercosur-EU agreement,” the Brazilian president wrote on X on Sunday after his meeting with Ms. von der Leyen.

Brazil’s Finance Minister Fernando Haddad, another proponent of the pact, attended a dinner in Rio de Janeiro with French President Emmanuel Macron on Monday and held a bilateral meeting with French Finance Minister Antoine Armand. In an interview with CNBC on Sunday, Mr. Haddad said, “If it weren’t for France, perhaps this agreement would already be signed.”

If concluded, the agreement will still need to undergo several steps, including a review of the new rules by the European Council. Negotiations for the pact began in 1999.

According to the latest data from Brazil’s Foreign Trade Secretariat (SECEX), which is linked to the Ministry of Development, Industry, Commerce, and Services (MDIC), trade between Brazil and the EU totaled $80.5 billion from January to October this year, a 4.7% increase compared to the same period in 2023. Oil is Brazil’s top export to the European bloc, accounting for 8.8% of shipments, while medicines and pharmaceutical products represent 8.5% of the EU’s exports to Brazil.

Source: Valor Internacional

Sharing is caring!