Bloc reportedly intends to wait for presidential election in Brazil

06/16/2022

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Virginijus Sinkevicius — Foto: Silvia Zamboni/Valor

The European Commissioner for the Environment, Virginijus Sinkevicius, told Valor that by the end of the year, the European Union may present to Mercosur its demands for additional commitments in the environmental front. This would give a new impetus to the bi-regional free trade agreement.

For Pascal Kerneis, managing director of the European Services Forum (ESF), the commissioner reflects the intention to wait until after the presidential election in Brazil, in October. The executive now says that, for the first time in a long time, he is optimistic about the direction of the European Union-Mercosur agreement.

The European bloc, since the beginning of 2021, has been talking about presenting Mercosur with a proposal for a side letter to the negotiated agreement, to mitigate a good number of concerns raised by several member states, mainly involving the protection of the Amazon.

Without mentioning internal differences between environment and trade, the commissioner argues that the delay is because the European Union needs to make the side letter compatible with the Green Deal, the European strategy for growth until 2050. The Green Deal is to be reflected in all major policies of the community bloc, including to meet issues raised by the European Parliament.

For Mr. Sinkevicius, the new geopolitical conditions do not influence the directions of the bi-regional agreement. “I don’t think it has a big impact, because we address issues that haven’t changed,” he said, apparently referring to persistent environmental issues in Brazil raised by some European sectors.

Asked if opposition to the European Union-Mercosur agreement had subsided lately, the commissioner replied: “Members of Parliament have the democratic right to raise their questions and I think they are legitimate questions to know whether our trade agreements are in line with our main policies. I think they should be in line.”

For Mr. Kerneis, the Brazilian election is on the radar, but what seemingly concerns him is the crisis in Argentina, with high inflation, social demonstrations and other turbulences.

“The stars may not be aligned between Brazil and Argentina,” he says. And the European Union needs to look more for the South American market, to compensate for lost business in other parts of the world.

He says, however, that he is now encouraged because the countries that will assume the rotating presidency of the European Union in the coming semesters are very favorable to the agreement with Mercosur. In two weeks, France will hand over the presidency of the European bloc to the Czech Republic, a major automotive producer. In the first half of 2023, it will be Sweden’s turn. And in the second half of next year, the presidency will be held by Spain.

The signing of the European Union-Mercosur agreement could thus have a chance to take place in the second half of 2023, with the Spaniards in the presidency of the European bloc, in the expectation of some sources.

The implementation of the free trade agreement between Mercosur and the European Free Trade Association (EFTA, formed by Switzerland, Norway, Iceland, and Liechtenstein) also depends on additional commitments by Brazil (and its partners in environmental protection) with the Europeans, a Swiss representative told a Brazilian negotiator this week in Geneva.

On the other hand, discussions with Asia are moving forward. Mercosur is expected to sign a trade agreement with Singapore in July. After that, it may start negotiations with Indonesia and Vietnam.

The European Union on Friday will relaunch in Brussels the negotiation of a trade agreement with India, one of the countries with the highest growth rate in the world. The expectation is to conclude the understanding by early 2024. The two sides have already been negotiating for 10 years, but the discussions were suspended due to India’s resistance to reducing tariffs on wine and car imports.

*By Assis Moreira — Geneva

Source: Valor International

https://valorinternational.globo.com/