EU warms to unlocking stalled Mercosur trade deal

By Philip Blenkinsop

STOCKHOLM (Reuters) – The European Union is warming to the idea of concluding a major free trade deal with Brazil and its Mercosur neighbours, with “decisive progress” possible by July, a senior EU official and Swedens trade minister said on Friday.

The EU and the Mercosur bloc of Argentina, Brazil, Paraguay and Uruguay completed negotiations 2019 but the deal has been on hold due to concerns, particularly in France, about Amazon deforestation and Brazils commitment to climate change action.

The European Commission has proposed Mercosur accept clear sustainability commitments, on which European Commission Vice President Valdis Dombrovskis said it was already consulting EU members and lawmakers and Mercosur countries.

“We see the next EU-Latin America summit in July as an important reference point, by when we should have decisive progress on this,” he said after a meeting of EU trade ministers in Stockholm.

Johan Forssell, trade minister of Sweden, which holds the rotating EU presidency, expressed hope that the process could be completed in the coming months.

“I think there is genuine support for moving in this direction,” he told a news conference. “Of course there are concerns, details and technical aspects but I believe we are moving in the right direction.”

The European Union believes Luiz Inacio Lula‘s defeat of Jair Bolsonaro in October’s Brazilian presidential election has created a window of opportunity.

Lula has promised to overhaul Brazils climate policy.

While Germany has pushed for a swift conclusion, France has said it is waiting to see progress in Brazil.

Simon Coveney, trade minister of Ireland, which like France is wary of increased beef imports, said fellow ministers believed a final deal could be concluded this year.

“There are strong positives and some negatives as well,” he said referring to the likely impact on Ireland.

“We will try to be constructive in the context of Mercosur also, while recognising that Ireland has particular concerns that we need to try to protect against.”

(Reporting by Philip Blenkinsop; Editing by Hugh Lawson)