Both the German and the Brazilian government want to boost the negotiations on a free trade agreement between the EU and the South American confederation Mercosur.

State Secretary for Economic Affairs Franziska Brantner said in the Bundestag that work is being done in close coordination with the European Commission and the other member states to find solutions quickly. Brantner flies to Argentina, Chile and Brazil with Chancellor Olaf Scholz (SPD) at the weekend.

Brazilian President Luiz Inácio Lula da Silva is also pushing for an agreement. “The agreement with the EU is urgently needed,” said Lula on Wednesday (local time) in Uruguay’s capital, Montevideo. He recalled that such an agreement had already been discussed during his first two terms of office (2003 to 2010). In Montevideo, Lula also advocated joint negotiations between Mercosur and China.

The EU has been negotiating with Mercosur for a long time

The EU has been negotiating a trade deal with Mercosur (Brazil, Argentina, Paraguay and Uruguay) for a long time. In 2019, the negotiators agreed on the agreement. The treaty would create the largest free trade area in the world with around 780 million people. However, implementation has stalled. Brantner said the federal government is committed to ratification – but with verifiable, binding protection of environmental, social and human rights and with an enforceable supplementary agreement to preserve the green lungs of the earth.

According to Brantner, the fact that the EU and the Mercosur countries have not made any progress on the trade agreement in recent years is due to the “massive and uncontrolled deforestation”, especially in the Amazon region, under the “right-wing extremist” President Jair Bolsonaro. The left-wing politician Lula da Silva, who was sworn in as president for the third time on January 1, was not considered a Green in his previous terms of office, but has now promised to focus on environmental and climate protection.

“We must now use the change of government under the democratic President Lula as an opportunity. To do this, we need a clear commitment from the Mercosur states that trade with the EU is not at the expense of the rainforest and nature and the local people. We will but also make our contribution to making this financially possible,” said Brantner.

Union calls for speedy ratification

The Union called on the federal government to speed up. She should work to ensure that the agreement is ratified this year, said CDU MP Stefan Rouenhoff. An application by the Union faction states that almost a quarter of a million jobs in Germany are already due to exports to Mercosur. “Free trade with the Mercosur countries creates new export opportunities and sales markets for the European and German economy.”

Conversely, Brazil, the largest economy in Latin America, with its enormous natural resources is an interesting partner given the tense situation on the energy and food markets due to the Ukraine war. Neighboring Argentina has already offered itself as an energy supplier for Germany.