Lula wants a strategic and less economic EU-Mercosur agreement – 06/23/2023 – Market

Less economic, more strategic: it was this bias that Lula suggested to French President Emmanuel Macron to deal with the trade agreement with Mercosur, according to Brazilian government sources who attended the working lunch of the two leaders this Friday (23 ), in Paris.

The president would have suggested to Macron that he assess the advantages of the trade agreement by the biases of energy and food security – two areas affected in the European community since the beginning of the War in Ukraine. Investment in South America offered investment diversification in a conflict-free region, according to the government.

In response, Macron would have reinforced the importance of creating guarantees that would avoid endorsing anti-environmental policies, such as those conducted during the Bolsonaro government. Despite the shift in climate policy under the Lula government, the French must maintain environmental constraints like a vaccine.

The Brazilian delegation hopes that breaking French opposition to the Mercosur agreement will help dissolve resistance from other European countries, such as Belgium and Poland.

The agenda came shortly after Lula described the additional letter from the European Union as a threat, which makes new demands for the trade agreement between the European bloc and Mercosur. The speech took place at the end of the New Financial Pact summit, convened by Macron.

Called a “side letter”, the additional term is today one of the main impasses for the conclusion of the EU-Mercosur agreement, which had negotiations closed in 2019, during the first year of the government of Jair Bolsonaro (PL), but has not yet been ratified by the two blocks.

Officially negotiated since 1999, the economic treaty has sustainability standards, but they are not binding. The side letter seeks to make some environmental commitments mandatory. However, members of the Brazilian government consider the conditions too strict.

The Brazilian government must articulate a response to the additional letter from the European Union to Mercosur by July 4, when there is a meeting between the countries. The message should be sent to Europeans during the EU-Celac meeting, promoted by the European bloc for the Latin American community on the 17th and 18th of July.

Initially, President Lula would not return to Europe for the meeting, but the possibility was again considered by the government as a way of articulating the trade agreement.

According to members of the federal government, the message that the president sought to convey to the French president during the working lunch is that it is possible to accommodate sensitivities, in reference to the resistance of French rural producers and also on the part of parliamentarians.

Lula would have argued that the agreement also presents sensitivities for the industry in Brazil and Argentina.

Lula reinforced the invitation to Macron to participate in the Amazon summit, which Brazil is promoting in early August in Belém. Macron replied that the PT can count on him on the Amazon agenda, as well as on renewable energy.

Without confirming a date, the French president mentioned that he intends to visit Brazil in the second half of the year. The Minister of Finance, Bruno Le Maire, also communicated his intention to go to Brazil. The agenda seeks to advance understanding between the Brazilian agribusiness sector and French agricultural unions.

The lunch served at the Élysée Palace, the official residence of the French president, had codfish and wine.
The two presidents also reinforced their positions on the War in Ukraine. Lula told Macron that he sees no military way out of the conflict and that there would be no means to corner Russia.

Ministers Fernando Haddad (Finance), José Mucio (Defense) and Mauro Vieira (Foreign Relations) participated in the lunch, in addition to councilor Celso Amorim.

Also during lunch with the French president, Lula would also have asked, according to sources in the Brazilian delegation, for a resumption of the pace of construction of the nuclear-powered submarine. The work is part of the Submarine Development Program (Prosub), whose partnership with France was signed in 2008.

According to the commander of the Navy, Marcos Sampaio Olsen, who accompanied the president on the agenda, the challenge would not be technological or budgetary, but one of reducing costs and risks in obtaining the submarine. According to Olsen, the nuclear-powered submarine should be launched in 2031 and start operating in 2037.

After lunch, Lula received executives from the Naval Group at the hotel where he is staying in Paris, which specializes in naval defense projects and operates in the Itaguaí naval complex (RJ).

The President also met with the President of the Republic of Congo, Denis Sassou, and the Mayor of Paris, Anne Hidalgo. At the end of the day, the PT traded dinner with the crown prince of Saudi Arabia, Mohamed bin Salman al Saud, for a telephone conversation with the leader. The president’s flight takes off late this Saturday morning (24), back to Brazil.