Lula in Paris: why France is key to unlocking the EU-Mercosur agreement – 06/24/2023 – Market

Despite President Luiz Inácio Lula da Silva (PT) claiming to be “crazy” to finalize an agreement between Mercosur and the European Union, as he declared last Friday (23) in Paris, the situation is not that simple. One of the biggest difficulties is to convince France, a key country in the current discussions to try to unblock the implementation of the free trade agreement between the two blocs, under negotiation for more than two decades.

The issue was discussed at a working lunch on Friday at the Élysée presidential palace between the French leader, Emmanuel Macron, and President Lula, accompanied by a delegation made up of Finance Minister Fernando Haddad (PT) and advisor special of the presidency Celso Amorim.

An agreement for the creation of a free trade area between Mercosur and the European Union was concluded in 2019, after 20 years of negotiations. But the text has not yet been ratified by European national parliaments or signed by the bloc’s leaders.

To make matters worse, some parliaments, such as that of France in mid-June, have been warning their governments that they will not vote on the text in its current state, alleging concerns about the environmental impact and competition for Brazilian agricultural products. Last year, the European parliament also approved a law that prohibits the importation of products linked to deforestation into the continent.

Due to the significant increase in deforestation in the Amazon during the administration of former President Jair Bolsonaro (PL), the Europeans made an addendum to the commitment signed in 2019 with new requirements in the environmental area, an initiative at the time defended by France. The document also introduces penalties for countries that do not meet the climate targets of the 2015 Paris Agreement.

The Brazilian government vehemently contests these new requirements. “Trade agreements have to be fairer. I am dying to make an agreement with the European Union, but it is not possible. The additional letter that was made by the European Union does not allow an agreement to be made. We will make a response, but we need to start discussing”, declared Lula in a round table of leaders coordinated by Macron at the end of the summit meeting that discussed a new architecture for the world financial system.

“It is not possible that we have a strategic partnership and there is an additional letter threatening a strategic partner,” Lula pointed out, referring to the addendum made by the European Union. In Italy, which he visited before arriving in France, Lula had also already criticized the new European demands.

The Brazilian government knows that France is not the only country where farmers, environmentalists and NGOs are contesting the ratification of this agreement, alleging, among different factors, problems with the use of pesticides in Brazil that are prohibited in Europe, dumping and imbalances between labor rights of the two blocks.

“Many European countries hide behind France,” a Brazilian diplomat told BBC News Brasil, referring to countries like Poland, Ireland and Belgium.

But France, due to its economic and political weight in the bloc, is the most prominent interlocutor in these negotiations. The Brazilian government is betting that if it succeeds in negotiating with France, other countries will follow the same path, says another Brazilian diplomat.

The difficulty is that in France agriculture is an economic sector that is strongly defended by the political class. It is something linked to French tradition and culture. The traditional visit of French presidents to the agriculture fair, one of the largest fairs in the sector on the continent, is an event widely publicized by the country’s press.

Macron, with popularity problems and without an absolute majority in parliament after being re-elected, is under pressure not only from farmers, but also from politicians linked to ecology, as well as environmentalists. In his first term, his performance in the area of ​​the environment was criticized by a good part of civil society.

The French president knows that if he publicly defends the implementation of this agreement in its current state, without new guarantees in the environmental area, he will be in a complicated situation with farmers and part of the political class.

In a press conference this Saturday morning (24th), shortly before leaving for Brazil, Lula said that, given the difficulties that President Macron faces in the French parliament, because he no longer has an absolute majority, “if we can talk to our friends more to the left to be able to help in the approval of the agreement, we are going to do it”. On Friday, Lula met with Jean-Luc Mélenchon, leader of France Insubmissa, which commands a coalition of leftist parties in parliament and which includes ecologists.

The Brazilian government hopes that the agreement can move forward with the Spanish presidency of the European Union, which begins in July. Spain is considered more favorable to the trade agreement between the two blocs. But the problem of gaining French support remains.

Lula also said this Saturday that a response letter to the Europeans will be discussed at the next Mercosur meeting and should be sent to the European Union before the next summit between the EU and the Community of Latin American and Caribbean States (Celac), which starts on 17 July in Belgium.

“We have to respond to the additional letter that the European Union sent and I think that by the end of the year we will have a decision on the matter. I hope that we have the capacity and wisdom to do this because it is important for the European Union and for Mercosur It is important for the CELAC meeting that will take place in July’, Lula pointed out.