EU contacts Brazil to resume Mercosur trade pact talks, sources say

Representatives of the European Union have approached the Brazilian government to relaunch talks with South America’s Mercosur bloc on a stalled trade deal, two sources with direct knowledge of the matter said. Reuters.

The contact comes amid rapid changes in global supply chains following the pandemic and the war in Ukraine, which have increased Brazil’s influence as an agricultural powerhouse, according to a Brazilian official who spoke expressed anonymously because the conversations are private.

Since 2021, the EU has offered a side letter to the deal to include environmental safeguards, concerns over growing deforestation in the Amazon that have been blamed internationally on President Jair Bolsonaro’s government.

However, this addendum has not yet been drafted.

Two weeks ago, officials from Brazil’s economy and foreign ministries had a preliminary conversation with EU envoys, and another meeting is scheduled for late September to outline further talks, the source said. .

“This discussion has been buried. They have come back to discuss the agreement between Mercosur and the European Union precisely because they need agricultural, mineral and energy raw materials. They can no longer count on Russia, there has the problem of supply chain disruption, over-reliance on Asia,” the source said.

Mercosur Agreement

A European diplomat confirmed Reuters the resumption of contacts to launch a new round of talks on the Mercosur agreement, which took two decades to negotiate and would create the largest free market in the world in terms of population.

According to the Brazilian source, the Europeans are interested in taking the deal in-house and the two sides of the table will now discuss the terms, with the side letter on environmental preservation expected by the end of This year.

Negotiations of the trade pact between the EU and the Mercosur bloc of Argentina, Brazil, Paraguay and Uruguay were completed in 2019, but environmental concerns have put up resistance to the agreement’s approval by the legislative assemblies of the 26 EU Member States.

The attempt to resume talks comes two months ahead of elections in which Bolsonaro is following leftist former President Luiz Inácio Lula da Silva, who favors reopening negotiations to add provisions on the environment but also human rights. people and technology transfer. Read the full storyRead the full story

Bolsonaro aides say the deal should not be reopened.

Last month, MEP Anna Cavazzini and two other MEPs from the Greens/EFA political group traveled to Brazil to assess the threat posed to the Amazon by illegal gold mining and logging that have exploded under Bolsonaro. She told Reuters environmental concerns meant it was impossible for the trade deal to go through with Bolsonaro in power.

France, the EU’s biggest agricultural producer, is one of the most vocal opponents of the deal and said last year there was no chance of ratifying it. Read the full story

Data shows that deforestation in Brazil’s Amazon rainforest hit a record high in the first seven months of this year, as the country heads into the worst part of the annual fire season. Read the full story

For the Brazilian government, the environmental issue served as a pretext to delay the pact for protectionist reasons, with opposition coming mainly from the large agricultural states.

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