Brazilian President Luiz Inacio Lula da Silva will not attend the signing ceremony for the long-awaited free trade agreement between Mercosur and the European Union. The ceremony is scheduled for January 16, 2024, in Asuncion, Paraguay, and Lula’s absence has created diplomatic tensions within the South American bloc. While presidents from Argentina, Paraguay, and Uruguay are expected to be present, Brazil will be represented by Foreign Minister Mauro Vieira.
The trade agreement, considered one of the largest globally after over 25 years of negotiations, has significant implications for both regions. Special guests at the signing include presidents from Panama and Bolivia, the latter of which seeks to join Mercosur as a full member.
Lula’s decision to skip the signing comes at a critical moment for the agreement. On the eve of the ceremony, he met with Ursula von der Leyen, President of the European Commission, in Rio de Janeiro. Brazilian diplomats characterized this meeting as holding more political significance than the upcoming ceremonial signing. Historically, Brazil has been a key supporter of the deal, which aims to eliminate or reduce tariffs on thousands of products and enhance investment across various sectors, thereby creating a market of over 700 million people.
Lula’s absence has raised eyebrows among regional partners and highlighted underlying diplomatic tensions. Reports from Argentine newspaper La Nacion indicate that senior Argentine officials criticized Lula’s actions, asserting he “set up a parallel summit” a day before the signing, which they viewed as disrespectful. Additionally, Brazilian daily O Globo reported that Lula aimed for a “victory photo” with top European officials, possibly to bolster Brazil’s position as a guarantor of the agreement and to distance himself from Argentine President Javier Milei, amidst deteriorating relations over differing views on the Trump administration’s involvement in Venezuela.
Despite the controversy, Brazil’s government has attempted to downplay the significance of Lula’s absence. They stated that the signing event was initially intended to be at the ministerial level but was elevated to a presidential ceremony by Paraguay at the last moment.
The situation is complex on the European side as well. The agreement must undergo ratification in the European Parliament, a politically sensitive process facing opposition from agricultural and environmental groups. Approximately 150 members of the European Parliament have already indicated potential legal action or initiatives to obstruct or delay approval.
To mitigate potential delays in implementation, the Council of the European Union is considering the provisional application of certain chapters related to political dialogue and institutional cooperation. This approach would allow for partial advancement of the agreement’s political framework while legislative discussions on trade commitments continue.
The EU-Mercosur agreement holds substantial economic and geopolitical weight, aiming to facilitate trade and investment across key sectors, including industry, agriculture, and services. It promises significant benefits for both regions, yet its future remains uncertain amidst the current political dynamics.
