Brazil's Lula visits Spain with Mercosur deal on agenda

AP , Tuesday 25 Apr 2023

Brazilian President Luiz Inácio Lula da Silva arrived in Spain on Tuesday on the second stop of a European tour aimed at resetting relations and making progress on a long-delayed trade deal between the European Union and the South American bloc Mercosur.

Lula Spain visit
Brazil s President Luiz Inacio Lula da Silva smiles as he shakes hands with Spain s Deputy Prime Minister and Minister of Economic Affairs Nadia Calvino (R) during a Spain-Brazil business meeting at the Spanish Chamber of Commerce in Madrid on April 25, 2023 during his two-day visit in Spain. AFP


Following five days spent in Portugal, Lula attended a business forum in Madrid before meetings with Spanish Prime Minister Pedro Sánchez and King Felipe VI on Wednesday.

The pending EU-Mercosur trade deal will be high on the agenda. The 27-member EU completed negotiations with Mercosur, which includes Argentina, Brazil, Paraguay and Uruguay, in 2019. But ratification has stalled.

Spain takes over the rotating EU presidency in July, while Brazil will simultaneously assume the equivalent role in Mercosur. Both are eager to finalize pending aspects of the deal.

“Brazil and Mercosur partners are engaged in dialogue to conclude the negotiations with the European Union and we hope to have good news this year," Lula tweeted following meetings with Spanish business leaders. ”It is a very important agreement for everyone and we want it to be balanced and to contribute to the reindustrialization of Brazil."

The Mercosur-EU agreement will mean the integration of a market of around 800 million people, about a fourth of the world’s gross domestic product and more than $100 billion in bilateral trade of goods and services. The deal would cut customs duties and ease access for agricultural exporters to the EU market, and for European manufacturers to Mercosur countries.

Lula added that conditions “are right” to deepen commercial cooperation, singling out his hosts.

“We want to attract a new wave of Spanish investments. The infrastructure investment program that I will launch next May will bring promising opportunities,” he said.

Ratification has stalled because of EU worries over deforestation stoked during the leadership of Lula’s predecessor, Jair Bolsonaro, though Lula's reelection has assuaged these fears, according to Spanish officials. Bolsonaro defanged environmental authorities, encouraged illegal gold mining in Indigenous areas and oversaw a surge in deforestation to its fastest rate in two decades. However, France remains preoccupied with protecting its farmers from imported Latin American goods.

Jordi Cañas, a center-right lawmaker from Spain in the European Parliament, said that he hoped a final draft agreement would be ready for the July 17-18 joint EU summit with the Community of Latin American and Caribbean States (CELAC).

“Pedro Sánchez has the obligation to lead the closing of the negotiations currently underway in order to have a document that can be signed and ratified at the EU-CELAC summit as a clear and forceful political message to strengthen EU-Latin America relations,” he told The Associated Press. “This moment requires political leadership that is equal to the opportunity that the EU-Mercosur agreement represents.”

José Antonio Sanahuja, an international relations professor and special adviser to the EU’s high representative for foreign affairs, Josep Borrell, said that Lula has strived to project his administration's environmental credentials.

“It was very difficult for the European community and parliament to accept an agreement given that (Bolsonaro's) nefarious environmental policy,” said Sanahuja, who is also director of the Carolina Foundation, which promotes educational and scientific cooperation internationally. More stringent environmental requirements may be added to the deal in annexes, he added.

The trip is an opportunity for Lula to ease tensions with Europe after his recent statements on Ukraine. Earlier this month, the Brazilian leader said that both Ukraine and Russia had decided to go to war, and claimed that the U.S. and EU were “stimulating” the fighting — drawing sharp rebukes from both.

During his first joint news conference with Portuguese President Marcelo Rebelo de Sousa, Lula made clear that Brazil condemned Russia’s occupation of Ukrainian territory, had voted to that effect at the United Nations, and denied ever having equated Ukraine with Russia. But he also said that anyone not talking about peace was contributing to war.

The risk is that Lula's repeated clarifications of his position will overshadow potential achievements, said Bruna Santos, director of the Brazil Institute at the Woodrow Wilson Center.

“Just like with his trip to China, his mentions regarding the situation in Ukraine took the focus of public opinion away from the results and economic ambitions of the visit,” Santos said regarding his recent travel to Portugal.

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