Lula does not give up government purchase in agreement with the EU – 05/29/2023 – Market

President Luiz Inácio Lula da Silva (PT) said this Monday (29) that he has a “problem” to be resolved within the agreement between Mercosur and the European Union. The Brazilian representative also stated that he will not open government purchases, one of the items in dispute with the Europeans.

Lula received Venezuelan dictator Nicolás Maduro this Monday morning (29) at the Planalto Palace, in an official visit that was announced at the last minute.

The two representatives made a joint declaration after the series of meetings and acts of signing of agreements, which the Brazilian took a turn and adopted a speech against the western powers.

“I’ll give you an example: we have a problem with the agreement with the European Union, which I want to do. If there’s anyone who wants to close the agreement with the European Union, it’s me. Now here’s the thing, we had a meeting in the industry , at the Fiesp Federation on Friday night, And those businessmen know that there is one thing that Brazil cannot deliver, which is government purchases”, stated Lula

“If we deliver government purchases, what will be left for small and medium-sized Brazilian companies? What will be left for a thriving economy of small and medium-sized companies? Nothing”.

The president made the statement after being questioned and discussing the need for greater integration in South America, so that countries in the region have the strength to negotiate.

The issue of government purchases is being a target of pressure from the Brazilian government, after the European Union increased the two demands for a more rigorous environmental commitment.

In January, during a visit by the Prime Minister of Germany, Olaf Scholz, Lula said that the text needs to undergo changes.

The agreement provides that, by assuming commitments in relation to public procurement markets, the European Union and Mercosur will guarantee greater competition and access in domestic bids. It also establishes that suppliers of goods and services on each side will be treated as if they were domestic in the bids carried out by the counterparty.

This is a topic seen as crucial for Brazil because it corresponds to a significant portion of the country’s GDP (Gross Domestic Product) and because it is the mechanism through which the government can exercise its public policies to meet development goals and reduce inequalities.