In a press conference for foreign press vehicles, Lula said that he intends to renegotiate the trade agreement between Mercosur and the European Union, concluded in 2019. The text foresees a series of changes in tariff and non-tariff topics, and depends, for example, on the approval of the text by the parliaments of all countries involved.
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Lula assesses that Brazil has undergone a process of deindustrialization in recent years, making it necessary to recover “the importance of industry in the national economy”. The agreement with the European Union would be an obstacle in this regard.
“What we want is to sit down with the European Union and discuss, depending on the needs of the European Union and ours, the rights that each person has,” said Lula. “I think negotiation has to be something where everyone wins. It can't be something where one wins and the other doesn't. What we want in the discussion of Europe is not to give up our interest in reindustrializing”, added the candidate.
Walked, but not that much
After 20 years of negotiation, the European Union and Mercosur concluded the document that, in 2019, was celebrated by President Jair Bolsonaro, saying it was one of the most important agreements of all time, with enormous benefits for the Brazilian economy. .
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Months after its release, however, European Union countries threatened to reject the text's bases due to the increase in fires in the Amazon and Brazil's environmental conditions. Negotiations remain at a standstill.
What does the agreement consist of?
The negotiation aims to eliminate tariffs on 91% of products that the European Union exports to Mercosur; in return, Mercosur would end tariffs on 92% of products exported to the European Union, for a period of 10 years. The economy ministry estimates that the agreement will increase Brazil's Gross Domestic Product (GDP) by US$87,5 billion over 15 years.
Subjects covered in the agreement
Tariff themes:
- Brazilian agricultural products will have tariffs eliminated;
- Brazilian exporters will also have preferential access to beef, pork and poultry, sugar, ethanol, rice, eggs and honey;
- 100% elimination of export tariffs for Brazilian industrial products;
- Export tariffs eliminated for several sectors for European products.
Non-tariff topics:
- Companies from the EU and Mercosur will be able to participate in public tenders between the two blocs;
- EU will recognize Mercosur product names;
- Withpromeattempt to reduce bureaucracy in trade between the two parties.
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