Negotiations between the EU and four South American countries over one of the largest free trade areas in the world have stalled. Chancellor Scholz calls for a willingness to compromise, and Brazil’s President Lula is also supporting the EU-Mercosur agreement.
The planned free trade agreement between the European Union and the South American economic alliance Mercosur would create one of the world’s largest free trade zones with more than 700 million inhabitants. But for more than 20 years there has still been no breakthrough in the negotiations. At a government meeting in Berlin, Chancellor Olaf Scholz and Brazilian President Luiz Inácio Lula da Silva called for a quick conclusion of the agreement.
After the consultations with Lula, Scholz said: “We are strongly committed to ensuring that the agreement is now finalized quickly.” Lula said that despite all the difficulties he would not give up on contributing to the success of the negotiations. “I hope that the European Union shows that it is interested in concluding the treaty.”
Scholz calls for “the greatest possible pragmatism”.
The EU’s talks with the four Mercosur states Brazil, Argentina, Uruguay and Paraguay about the free trade zone have been going on for 23 years. A fundamental agreement from 2019 will not be implemented due to ongoing concerns – for example about rainforest protection.
“There is a lot to be said for us improving relations between the European Union and Mercosur by bringing about such a trade agreement,” said Scholz. He is convinced that there will be a majority in favor of it in the European Council and the European Parliament once the agreement has been negotiated. “I ask everyone involved to be as pragmatic as possible and to be as willing to compromise as possible.”
France’s objections to the agreement
Lula actually wanted to conclude the negotiations on the EU-Mercosur agreement at a summit of the South American community of states on Thursday. However, this is now more than questionable, especially because of the resistance from France and the current Argentine government. French President Emmanuel Macron recently expressed skepticism about the agreement at the COP28 world climate conference in Dubai. This does not take biodiversity and the climate into account.
The Argentine government also criticized the planned agreement: it could have negative consequences for industry and agricultural exports. The new Argentine President Javier Milei, who is considered a supporter of the agreement, takes office on Sunday.
Habeck is hopeful
Federal Economics Minister Robert Habeck is also hoping for a joint push to save the EU-Mercosur agreement with Brazil. Germany and Brazil could develop a blueprint for the future trade relations of the EU and the South American economic association Mercosur, said the Green politician at the German-Brazilian Economic Forum in Berlin. You could then present this concept and say: “Look, Germany, the largest economic nation in Europe and Brazil, the most important country in the Mercosur states, we could imagine it like that. And then see what happens,” said Habeck.
But he also insisted on progress on the agreement. The world is not waiting for Germany and Europe – that’s why you are well advised to conclude trade agreements with countries that are as close to you as Brazil. Habeck referred to announcements by the Brazilian government that it wanted to do more to protect the rainforest.