Lula criticizes the device that provides for sanctions in the Mercosur-EU agreement

President Luiz Inácio Lula da Silva (PT) received this Monday (12), at the Planalto Palace, the President of the European Commission, Ursula von der Leyen. Among the themes of the meeting, the PT discussed the trade agreement between the European Union and Mercosur.

“I explained to President von der Leyen Brazil’s concerns with the additional instrument to the agreement, presented by the European Union in March of this year, which expands Brazil’s obligations and makes them subject to sanctions in case of non-compliance. strategic partners is based on mutual trust, not distrust and sanctions,” said Lula.

Von der Leyen’s trip to the country comes three months after the executive vice president of the European Commission, Margrethe Vestager, met in Brasília with the vice president of the Republic, Geraldo Alckmin (PSB). At the time, Vestager said it was necessary to adopt measures to “accelerate” the conclusion of the trade agreement between Mercosur (Brazil, Argentina, Paraguay and Uruguay) and the European Union.

The treaty has been in the works since 1999 and was approved in 2019, at the beginning of the government of former President Jair Bolsonaro (PL), but was not confirmed in the European Parliament. This occurred due to environmental barriers that were seen by analysts as pretexts for market protectionism.

Such as People’s Gazette showed, as well as in the Bolsonaro administration, Lula has also been facing resistance to move forward with the agreement due to environmental requirements. The Europeans want, for example, additional commitments from Mercosur and the environment and, as warned by Chancellor Mauro Vieira, in a public hearing in the Chamber, the text even allows trade retaliation against the countries of the South American bloc.

The EU has also banned exports of products from deforested areas, a measure that should affect items such as meat, coffee and soy from Brazil. The Lula government, however, argues that the measure should apply exclusively to illegal deforestation.

EU-Mercosur envisions the creation of the largest free trade zone in the world

Among other points, the EU-Mercosur plan foresees the creation of the largest free trade zone in the world, with a market of 780 million people and which would represent around 20% of world GDP and more than 30% of global exports.

According to a study by the Federal Government’s Foreign Trade Secretariat (Secex), the treaty could increase Brazil’s GDP by US$87.5 billion over the next 15 years, with this figure potentially reaching US$125 billion if the reduction of barriers is considered. non-tariff.

In the same period, the entity forecasts an increase of US$113 billion in investments in Brazil, and US$100 billion in earnings from Brazilian exports to the EU by 2035.

Lula wants to veto the European Union from participating in public purchases in Brazil

The trip by the person responsible for the political leadership of the European bloc also takes place days after the PT’s declaration that he will only sign the proposal if the signatory countries accept Brazil’s conditions. The petista said that “there will be no agreement” if the Europeans do not give in to wanting Brazil to open up public purchases to foreign companies.

“What do Europeans want in the deal? May Brazil open the doors to government purchases. That is, they want the Brazilian government to buy foreign things instead of Brazilian things”, said Lula during an agenda in São Bernardo do Campo (SP).

The PT resists opening the government procurement market to the foreign market. “And if they do not accept Brazil’s position, there is no agreement. We cannot abdicate government purchases, which are the opportunity for small and medium-sized companies to survive in this country”, added the petista.

The European Union, for its part, declared in an official document that putting the trade agreement into effect is considered a “priority” internally.

Brazilian and European businessmen defend agreement between the EU and Mercosur

Hours before Lula’s meeting with von der Leyen, Brazilian and European businessmen released a note of support for the trade agreement between Mercosur and the European Union. In the communiqué, the entities ask the negotiators to be more flexible, in order to reach a “balanced and timely” agreement.

The note highlights that the implementation of the agreement will be “crucial to leverage our bilateral relations to a new level”.

“By establishing one of the largest free trade areas in the world, which would cover almost a quarter of the global economy and 31% of world exports of goods, the agreement will provide concrete benefits for both blocs, including towards achieving climate neutrality” , says an excerpt from the joint note signed by the National Confederation of Industry (CNI) and the Confederation of European Companies (BusinessEurope).

The European Union, once Brazil’s main trading partner, now accounts for just 16% of the country’s global imports. The block occupies the third position among the main suppliers. On the other hand, Brazil was surpassed by countries like India and South Korea in the ranking of the main extra-bloc trade partners of the EU.

“We are confident that the balanced commitments agreed in 2019 allow both parties to promote bilateral trade and investment flows, diversify their supply chains, sustain well-paying jobs on both sides, while effectively protecting the environment. and meet the highest standards of sustainable development”, defended the businessmen in a note.