The Brazilian government is skeptical about the possibility of signing the European Union-Mercosur agreement in January, as promised by the Europeans, and believes that if it does not materialize, the South American bloc will throw in the towel on the agreement.
The free trade agreement would be signed on December 20 at a summit in Foz do Iguaçu, after 26 years of negotiations. Two days earlier, the President of the European Commission, Ursula von der Leyen, announced the postponement of the signing. France, one of the main opponents of the deal due to pressure from its farmers, won support from Italy on the eve of final procedures at the European Council.
In a letter, von der Leyen and European Council President António Costa expressed their expectation that the deal would be approved in January.
“We wish to express our firm commitment to proceed with the signing of the Partnership Agreement and the Interim Trade Agreement in early January, on a date to be agreed between the two parties,” they said in the letter.
Italian Prime Minister Giorgia Meloni, who held the deciding vote to block the text, told President Luiz Inácio Lula da Silva that she was confident in her ability to back the deal if given more time to build domestic support.
In the view of a senior Brazilian government official, the window of opportunity is short. If this deadline is not respected, even the Mercosur countries most favorable to the opening of markets, such as Argentina and Paraguay, could give up.
According to this official, the political situation in European countries is fragile, under pressure from nationalist parties, and it will be difficult to overcome resistance to the agreement in such a short period of time.
The burden of the failure of the agreement, according to the Brazilian government, will fall on the EU, since the Brazilians accepted the safeguards requested by the Europeans to quickly protect their products and postponed the signing at their request from December 2 to 20.
Planalto already has two presidential trips by Lula in February, to India and South Korea, to continue its market diversification strategy and announce trade agreements.
The idea of diversification was reinforced after Donald Trump’s tariffs. But with the European withdrawal, Mercosur will turn even more towards Asia, according to a member of the government.
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