Lula on the Mercosur–European Union agreement: reinforcing multilateralism

“It would be the most exceptional agreement made so far in this century and a response to unilateralism. We want to show that multilateralism will prevail and that it is the reason why the world took a leap in quality after World War II.” With this statement, President Luiz Inácio Lula da Silva reinforced on the morning of Saturday (7) the strategic importance of concluding the trade agreement between Mercosur and the European Union. The remarks were made during a press conference in Paris.

The topic was one of the key issues discussed during the Brazilian leader’s State visit to France and in bilateral talks with President Emmanuel Macron. “I told Macron: open your heart to Brazil and let us sign this agreement,” Lula joked. He emphasized Brazil’s willingness — especially as it is set to assume the presidency of the South American bloc in July — to engage in dialogue on the points that still raise concerns from the French perspective.

“France has no better friend than Brazil in South America, and Brazil has no better friend than France in Europe. If there is a problem, let us sit at the table, find where the difference lies, and resolve it. We must never forget: Mercosur and the European Union together represent a population of 722 million people, with a GDP of 22 trillion dollars,” the Brazilian President recalled.

We are going to continue talking to France, because France is a good political, economic, cultural, and historical partner. I am convinced that by the time I leave the Mercosur presidency, we will have this agreement signed with everyone smiling”

Luiz Inácio Lula da Silva, President of the Republic of Brazil

AGRICULTURE — One of the main concerns expressed by the French involves fears of losses in the country’s agricultural sector due to competition from Brazilian agribusiness. According to President Lula, Brazil already exports products such as soy and corn to Europe and has no intention of disrupting French producers’ trade. Lula believes there are points of convergence between the interests of both sides.

TWO-WAY STREET — "Our small and medium-sized farms may actually complement those in France. I have no intention of harming the small French farmer," he stated. "I do not want us to stop buying wine from France, even though we produce our own. I do not want to stop buying champagne from France, even though we make it as well. I do not want to stop buying French cheese, even though we also produce cheese. Trade policy is a two-way street: we sell, and we buy," Lula said. He emphasized that Brazil has nearly six million small farms of up to 100 hectares, and around 2.5 million small producers with plots of zero to 10 hectares, who are not part of agribusiness."

COLLECTIVE AGREEMENT — The Mercosur–European Union agreement reflects the interests of the 27 European countries and the four South American members. Both blocs in Montevideo announced the conclusion of the text at the end of 2024. According to President Lula, although the agreement could move forward despite French objections, he hopes to reach a consensus. “I do not want this to be an agreement that leaves people with sour faces. We will continue talking to France, because it is an important political, economic, cultural, and historical partner,” he said. “I am convinced that by the time I leave the Mercosur presidency, we will have this agreement signed—with everyone smiling.” Lula added that he will meet with President Macron at COP30: “I think that, once he gets there and stands under a 30-meter-tall tree, when he sees the beauty of the forest, he will agree.”

HISTORICAL BACKGROUND – Comprising 20 chapters, along with annexes and supplementary documents, the Agreement between Mercosur and the European Union was finalized during the Mercosur Summit in Montevideo on December 6. This partnership represents the largest trade agreement ever concluded by the South American bloc. Its entry into force depends on legal review, translation, formal signing, and final ratification by the authorities of both blocs.

SCOPE — The European Union is Brazil’s second-largest trading partner, with a trade flow of USD 92 billion in 2023. The agreement broadens Brazil’s commercial partnerships and supports the modernization of its industrial sector through integration into the European Union’s production chains. It is also expected to boost investment flows, reinforcing the EU’s position as the source of nearly half of the foreign direct investment stock in Brazil.