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Lula victory revives EU trade hopes for Latin America – POLITICO


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“This is the result we were all hoping for.” The center-left European lawmaker MEP Kathleen Van Brempt captured the temper in Brussels on Monday, because the EU breathed a diplomatic sigh of relief over the victory of left-winger Luiz Inácio “Lula” da Silva within the second spherical of Brazil’s presidential election.

Brussels has large ambitions in Latin America. The European Union must diversify its trade flows away from Russia and to a lesser extent China. With far-right incumbent Jair Bolsonaro on his manner out of energy, the EU is now eager to revive its ties with Brazil on local weather change, deforestation and trade.

“I look forward to working with you to address pressing global challenges, from food security to trade and climate change,” European Commission President Ursula von der Leyen tweeted to Lula on Monday morning.

But Brussels could have to attend in line. Russia needs to trade and China may even be competing for affect within the area, particularly after relations between Brazil and Beijing had soured beneath Bolsonaro. Chinese overseas ministry spokesperson Zhao Lijian welcomed Lula’s victory on Monday, saying that China needs to boost the excellent strategic partnership with Brazil to a brand new stage.

The most concrete manner for the EU to get its foot within the door is to lastly tie up the free ends with the trade deal between the EU and the Latin American Mercosur bloc made up of Brazil, Argentina, Uruguay and Paraguay.

The nearer cooperation wouldn’t simply ease trade between the economies on each side of the Atlantic, however can also be key for Brussels to be much less depending on China’s uncooked supplies for its inexperienced transition.

The Mercosur pact was sealed at a political stage in 2019 however has been successfully on ice since then, largely due to the rampant deforestation of Brazil’s Amazon rainforest beneath Bolsonaro, which dismayed the EU and French President Emmanuel Macron specifically. Free merchants additionally pointed to extra protectionist considerations, significantly in France, which held up progress for the deal over fears of opening the floodgates to imports of Brazilian beef.

Lula’s election will be the key to easing these environmental considerations and unlocking the Mercosur deal. In a huge win for the global fight against climate change, he has made clear he is eager to deal with deforestation of the Amazon.

From the EU aspect, the political stars are additionally aligned. A spread of trade-friendly international locations the Czechs, the Swedes and the Spanish are on the helm of the EU’s rotating Council presidency this yr and subsequent and have already mentioned they need to get the deal again on monitor.

There could also be bother forward

To get the settlement by the European Parliament, Brussels plans to barter an additional environmental safety doc with the Mercosur bloc to attempt to assuage local weather considerations.

But simply how far these further calls for ought to go is already a delicate dialogue throughout the European Commission, and can possible show to be much more contentious when it’s mentioned with the European Parliament, EU international locations and the Mercosur international locations.

“We is not going to nail it on the door of the Berlaymont,” mentioned a senior EU official, referring to the European Commission constructing in Brussels. “We have to play this rigorously.” The official confused that the EU ought to suggest one thing that’s “extra palatable for the opposite aspect.”

Van Brempt, the trade committee MEP from the socialists, fired a warning towards an excessive amount of flexibility from Brussels. If the Commission needs this deal to go by Parliament, further environmental commitments from the Mercosur international locations can’t be empty guarantees, she mentioned. If Brazil or the opposite international locations don’t dwell as much as their guarantees, they need to danger trade sanctions, according to the EU’s new policy of guaranteeing trade offers are inexperienced.

If Mercosur international locations have further calls for to carry to the desk, then so be it, Van Brempt argued. “We have to get this deal right,” she mentioned. “Trade is a key component of our geopolitical direction. For that, a renewed cooperation with Brazil is key.”

On his finish, Lula has already mentioned he needs to renegotiate some areas of the Mercosur deal in favor of Brazil’s industrial growth. Strengthening Brazilian business was one in all his most important guarantees in the course of the marketing campaign.

“In the primary six months, we are going to conclude the settlement with the European Union,” Lula said in September. That, he mentioned, have to be “an settlement that takes into consideration the necessity for Brazil to industrialize once more.”

Camille Gijs contributed reporting from Prague.

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