EU will not reopen agreement with Mercosur, says Commission – 01/31/2023 – Market

The speech by President Luiz Inácio Lula da Silva (PT) this Monday (30) that “something needs to be changed” in the agreement between Mercosur and the European Union surprised the European Commission in Brussels.

The agreement, which had its negotiation completed in 2019, cannot have its text changed. An additional instrument, however, is being discussed among the European countries of the union.

Lula spoke about the change after meeting with the Prime Minister of Germany, Olaf Scholz, at the Planalto Palace, in Brasília.

“We’re going to work very hard to make this deal come true. [entre União Europeia e Mercosul]but something needs to be changed, it cannot be as it is”, said the Brazilian. “We will close this agreement, if everything works out, by the end of this semester”, he concluded.

The EU Commission says that the document can be signed at the end of this semester. Entering into force, however, is something for next year.

“The European Commission is fully committed to finalizing the EU-Mercosur agreement, as declared by President Ursula von der Leyen in Davos on 17 January 2023. We expect to see decisive progress later this year. And now we have a unique window of opportunity to finally move forward with the EU-Mercosur agreement,” he told Sheetthis Tuesday, the spokeswoman for the trade affairs commission, Miriam García Ferrer.

Finalized in 2019, the agreement ended up being put on the back burner after the attitudes of the government of Jair Bolsonaro in relation to the deforestation of the Amazon and the disrespect for the environment have displeased the member countries of the EU. There was opposition from blocks of MEPs and governments in France, Austria and Holland, for example.

That’s why the additional instrument was created, which will be appended to the main text. Commission sources familiar with the matter say that, if the terms of the original agreement were to be reopened, it would take another ten years of discussions.

According to Ferrer, this additional instrument directly addresses sustainability issues. “The objective is to bring greater clarity and detail to the commitments already negotiated by both parties within the scope of the agreement, notably within the scope of the Chapter on Trade and Sustainable Development (TSD).”

“This reciprocal instrument would complement a package of measures proposed by the Commission that aim to address sustainability issues in line with our European Green Deal objectives. It includes bilateral cooperation and autonomous EU measures on deforestation and due diligence [auditoria].”

For now, the instrument is only being discussed in Europe. Mercosur countries have not seen anything related to this yet. But the Commission hopes that, in a few months, the final text will already be sent across the Atlantic for approval by the Mercosur countries, which today are Argentina, Brazil, Paraguay and Uruguay.

Even if it is signed in the first half of the year, as suggested by President Lula, for it to come into force, the text will have to go through a series of procedures.

Currently, the technical work to finalize the commercial part of the agreement and the legal revision of the text are still ongoing. “We will have to reconcile the technical and political calendars before we can set a clear timetable for the ratification and entry into force of the agreement,” said Ferrer.

Once finalised, the text will be translated into all EU languages. Only then can the Commission submit its proposals for signing and concluding the agreement to the Council and the European Parliament.

“We fully recognize concerns about sustainability and environmental issues, in particular the problem of deforestation in some Mercosur countries. Addressing these concerns is a priority for the European Commission,” said Ferrer.

“We are encouraged by the promises made by the new Lula government in Brazil to fight deforestation. We are resuming the conversation about the EU-Mercosur Agreement with the new government of Brazil and also with the other members of Mercosur”, he concluded.