Scholz and Lula want to fight for free trade agreement

France and Argentina are opposing the conclusion of the trade agreement between the EU and the Mercosur states. According to media reports, it has failed for the time being. German Chancellor Scholz and Brazil's President Lula, on the other hand, have declared their intention to push through an agreement.

German Chancellor Olaf Scholz and Brazilian President Luiz Inacio Lula da Silva have announced that they intend to fight for the conclusion of the EU-Mercosur trade agreement. "I am convinced that there will be a majority in the EU Council and the EU Parliament in favor of the agreement," said Scholz in Berlin when asked how he intended to deal with the opposition of French President Emmanuel Macron. Lula emphasized that all other French presidents before Macron had also rejected such a trade agreement. "I am not giving up on Macron", said Lula. He had advised the French president to talk to his wife and then agree to the agreement.

Lula referred to the Mercosur summit on Thursday in Brazil, where there will be a "decisive moment" for negotiations. "I hope that the EU will decide that it is interested in the agreement", he added. Scholz emphasized that Germany and Brazil were committed to a "speedy" conclusion of the EU agreement with the four Mercosur countries Brazil, Argentina, Uruguay and Paraguay. Brazil and Germany supported the conclusion in order to exploit the enormous potential in trade and economic relations.

"Brazil is our most important trading partner in South America," emphasized Scholz. "More than 1000 German-Brazilian companies make a significant contribution to this." The agreement would create one of the world's largest free trade zones with more than 700 million inhabitants. Talks on this have been ongoing for well over 20 years. However, an agreement in principle reached in 2019 has not been implemented due to ongoing concerns, for example regarding rainforest protection. Scholz said it was necessary to conclude the negotiations now.

Scholz calls for "the greatest possible pragmatism"

"There is a lot to be said for improving relations between the European Union and Mercosur by concluding such a trade agreement," said Scholz. He was convinced that there would be a majority in the European Council and the European Parliament once the agreement had been negotiated. "I would ask all parties involved to be as pragmatic as possible and as willing to compromise as possible." The German-Brazilian government consultations were the first in more than eight years. Both sides signed a joint declaration of intent on a partnership for a socially just and ecological transformation.

According to media reports, the EU-Mercosur trade agreement has failed for the time being. As the digital media company Table Media and the Frankfurter Allgemeine Zeitung (FAZ) reported, citing negotiating circles, the EU Commission no longer sees any chance of an agreement being announced at the Mercosur summit. However, it is not clear from the report whether the talks will be broken off or whether a free trade agreement could be reached at a later date.

Commission President Ursula von der Leyen actually wanted to sign the agreement at the meeting with the Mercosur Group in Rio de Janeiro on Thursday. However, the agreement between the EU and Brazil, Argentina, Paraguay and Uruguay failed due to resistance from Argentina as well as a lack of support from France. The Argentinian government, which will be replaced in a few days, had signaled that it was not prepared to reach an agreement.

Argentina's government tears up "bad contract"

The Argentinian government warned in particular of the negative consequences of the planned free trade agreement with the European Union. "It is a bad deal that could have negative consequences for industry and agricultural exports," said Argentina's Foreign Minister Santiago Cafiero. "We have always called for the negotiations to be reopened, because the current version does not benefit both blocs, but cements the asymmetries and reinforces the existing productive, financial and technological differences."

At the Mercosur summit, Brazil's President Luiz Inácio Lula da Silva actually wanted to announce a breakthrough in the negotiations with the EU. "We have made it clear to the European negotiators since last week that they do not have the necessary flexibility to sign the agreement on Thursday, and now time is running out," said Argentina's Foreign Minister Cafiero.