Brazil’s Lula says Mercosur looking for ‘win-win’ trade deal with EU

SAO PAULO (Reuters) -Brazilian President Luiz Inacio Lula da Silva said on Tuesday that the Mercosur bloc of Brazil, Argentina, Paraguay and Uruguay wants its trade agreement with the European Union to be a “win-win” situation.

Lula has criticized some of the European Union’s requests for the deal, including an addendum attaching sustainability and climate change commitments and introducing penalties for nations failing to comply with climate goals.

“We don’t want impositions on the Mercosur,” Lula said in a live broadcast on social media. “It’s a deal of strategic partners, so one cannot threaten the other. Let’s sit down and work out our differences.”

The European Commission and the South American bloc struck the deal in 2019 after lengthy negotiations, but it was then put on hold largely due to European concerns over Amazon deforestation.

Leaders of the Mercosur gather for a summit in Argentina on Tuesday, with Brazil set to take the group’s temporary presidency for the next six months.

The Brazilian leader said he would work for the deal to be completed in that period, despite calling some of the European Union’s demands “unacceptable”.

In addition to fearing environmental sanctions, Lula has also been a vocal critic of a procurement clause allowing European companies to sell to Brazil’s public sector, which he says could “kill” some Brazilian companies.

Lula recently met with French President Emmanuel Macron and European Commission President Ursula von der Leyen to discuss the deal.

Von der Leyen visited Latin America in June and said she hoped the deal would be finalized by the end of the year at the latest.

“The European Union made a proposal, we sent a response, then they sent a letter imposing some conditions that we don’t accept,” Lula said. “We are now preparing a response letter saying what we want so the agreement can be consolidated.”

(Reporting by Gabriel Araujo; Editing by Andrew Heavens and Alistair Bell)