Brazil takes over Mercosur by challenging integration and the European Union agreement

President Luiz Inacio Lula da Silva The (PT) will take to the 62nd Summit of Mercosur Presidents, on Tuesday (July 4, 2023), the plea for greater regional integration and will serve as a challenge to continue discussions on the agreement with the European Union. Brazil holds the presidency of the bloc, with a mandate until the end of 2023.

However, internal negotiations on the agreement should not progress at this meeting. One of the reasons is that Brazil is still building a proposal for Europeans to access public procurement in the country. The current government opposes equal opportunities for European companies with Brazilian companies.

Another point questioned by the Brazilian executive is the proposed trade penalties for non-compliance with environmental standards. The issue was included in an additional letter submitted by the EU to Mercosur in March.

Lula says that even the Europeans have not fully complied with what the Paris Agreement called for and the accusation has angered them. In June, he said that Doc “unacceptable” And ask for more “sensitive” that it “modesty” in discussions.

The issues are the main obstacle on the Brazilian side to close the Mercosur-EU FTA. According to Itamamaraty’s Secretary for Economic and Financial Affairs, Mauricio Lyrio, the Brazilian proposal will be presented first to the Mercosur countries and only then to the European Union.

Although the discussion on the two topics should not progress to the summit, Lula must address the issues in his speeches during the meeting. The president wants to complete the agreement by the end of this year.

“The position of the President and the Brazilian government on the summit is to reaffirm Brazil’s interest in following Mercosur’s external agenda. The need to make adjustments, as already emphasized in the texts received and negotiated between Mercosur and the EU, but with a clear political signal that there is interest in Push the agreements forward and reach a good, balanced, interesting and suitable result for all parties.” Lyrio said.

Presidents Summit

On Monday (July 3, 2023), Lula will travel to Puerto Iguazu, in the province of Misiones, Argentina. The city borders with Brazil at Foz do Iguaçu, in Paraná, and with Paraguay, in Ciudad del Leste, in the far east of the country.

The meeting between the Heads of State will take place on Tuesday (July 4, 2023) from 10 am to 1 pm at the Melia Hotel located in Iguazu National Park. The complex is on the edge of Iguazu Falls. a The power is 360 He will attend the event in person.

The 62nd regular meeting of the Common Market Committee (Common Market Council) is scheduled to take place on Monday, which includes the foreign and economy ministers of the two countries.

Brazilian Chancellor Mauro Vieira will attend. The Ministry of Finance will be represented by Secretary for International Affairs Tatiana Roseto, and the Ministry of Development, Industry, Trade and Services will be represented by Executive Secretary Marcio Elias Rosa.

Mercosur consists of Argentina, Brazil, Paraguay and Uruguay. Venezuela has been suspended since 2016. Bolivia is in the process of joining. During the event, the heads of state of other South American countries also participate as associate countries.

According to Itamaraty’s Minister for Latin America and the Caribbean, Gisela Padovan, the main message for Brazil at the meeting will be to prioritize once again regional integration in all its aspects.

“We are committed to restoring the already existing South American integration in terms of trade, but we want to integrate in many other areas, such as infrastructure, health and defence. (…) To reduce the ‘cost of Brazil’, we need to integrate better. He said.

During the Brazilian presidency, the government intends to continue the debate on the Common External Tariff which, in practice, means circumventing the use of dollars in commercial transactions. In addition, Brazil also wants to discuss the joint car system, the pharmaceutical sector, energy integration, and infrastructure.

According to the ambassador, Mercosur is no longer only commercial in nature and has begun to gain political and social weight. One of Brazil’s goals at the head of the bloc is to hold a face-to-face social summit, which hasn’t been held in years. However, no date has been set for its completion yet. And the last such meeting took place on June 1, approximately, after it was suspended for 6 years.

Brazil X Mercosur relationship

The bloc was established in 1991 under the name of the Common Market of the South, and had trade exchanges that rose from 4.5 billion US dollars, in the year of its foundation, to 46.1 billion US dollars, in 2022.

The bloc’s trade relationship with the rest of the world reached US$727 billion in 2022. The main export destinations were China, the United States, and the Netherlands.

Brazil’s exports to Mercosur reached US$21.9 billion in 2022, which is equivalent to 6.5% of total exports from the country. Imports amounted to 18.9 billion US dollars, accounting for 6.9% of total imports.

Brazil has settled debt payments of US$99.3 million with Focem (Mercosur Structural Convergence Fund), which aims to reduce economic disparities between countries of the bloc.