EU warns against adjusting Mercosur trade deal

By Philip Blenkinsop

BRUSSELS (Reuters) – The European Commission said on Wednesday it would be unwise to renegotiate parts of its proposed free trade agreement with Brazil and other countries of the Mercosur bloc, given it took two decades to reach an initial deal.

Brazilian President Luiz Inacio Lula da Silva said last week his country would not sign the trade pact without adjustments, specifically pointing to his government’s opposition to allowing European companies to sell to Brazil’s public sector.

EU trade chief Valdis Dombrovskis said on Wednesday that there had been comments suggesting adjustments from both sides.

“The Commission’s general advice is not to reopen the agreement. It has been negotiated for a very long time,” he told a news conference to unveil the EU’s planned revamp of its ties with Latin America and the Caribbean.

“It strikes a carefully crafted economic balance, so if we now reopen, upset this economic balance, this may lead again to long negotiations with uncertain outcomes,” he continued.

The Commission, which oversees trade policy for the 27-nation EU, struck an agreement with the Mercosur bloc of Argentina, Brazil, Paraguay and Uruguay in 2019, but it has been put on hold due to EU concerns over Amazon deforestation.

The Commission has proposed attaching an annex to the agreement to show commitments on deforestation and other areas of sustainability and is awaiting Mercosur’s response.

Dombrovskis said it might be possible to reach a final deal on this in mid-July, when the EU will host a summit with Latin America and Caribbean leaders. This could help drive support for the trade pact, he said.

“We need to make significant progress in the summit which then sets a clear path towards finalisation,” he said.

(Reporting by Philip Blenkinsop; Editing by Christina Fincher)

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