The president of Brazil announced on Sunday that the agreement between the European Union and Mercosur will be signed on December 20 in his country. Both Brasilia and Foz de Iguaçu are considered as locations. Luiz Inácio Lula da Silva clarified the date and indicated the two cities during a press appearance in Johannesbusrgo (South Africa), after participating in the G20 summit with the President of the European Commission, Ursula von der Leyen, and his French counterpart Emmanuel Macron, among other allies. “Maybe it’s the biggest trade deal in the world,” the Brazilian said, referring to a deal nearly 25 years in the making.
Lula summarized in two figures the size of what will be the largest free trade area in the world: it is an agreement that practically involves 722 million people between the EU and the four Mercosur countries (Argentina, Brazil, Paraguay and Uruguay) which together amount to 22 billion dollars of GDP. Both parties signed the political chapter of the agreement a year ago.
The tariff war waged by US President Donald Trump has significantly increased the urgency of both blocs to seek alternative partners and conclude a trade deal that has been in the making for so long. President Lula has a huge interest in closing it before the end of the year, when his rotating presidency of the South American bloc and that of Denmark in the EU ends. The Brazilian confirmed that he intends to run for a fourth term next year.
France, which is the country that has led the opposition to the pact, is calling for a security clause to lend its support. In a parallel meeting at the G20, the French Foreign Minister, Jean-Noel Barrot, reminded his Argentine counterpart, Pablo Quirno, of the conditions imposed by President Macron as a prerequisite for French support for the agreement and, in particular, the need to finalize a solid escape clause with the Mercosur partners”, reads a note from the French Foreign Ministry cited by Efe.
This clause consists of a legal mechanism that would allow a party to temporarily limit imports of a specific product if they cause specific harm to a specific sector. France is particularly concerned about the impact of beef exports from Brazil and Argentina on its farmers.
Lula admitted to the press that once the text is signed in December, “there will be a lot of work to do to be able to start enjoying the benefits of that agreement, but we will sign it.”
