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PUERTO IGUAZU, Argentina: (Left to right) Bolivian President Luis Arce, Paraguayan president-elect Santiago Pena, Paraguayan President Mario Abdo Benitez, Argentine President Alberto Fernandez, Brazilian President Luiz Inacio Lula da Silva, and Uruguayan President Luis Lacalle Pou pose for the family picture during the Summit of Heads of State of Mercosur in Puerto Iguazu, Argentina, on July 4, 2023. – AFP
PUERTO IGUAZU, Argentina: (Left to right) Bolivian President Luis Arce, Paraguayan president-elect Santiago Pena, Paraguayan President Mario Abdo Benitez, Argentine President Alberto Fernandez, Brazilian President Luiz Inacio Lula da Silva, and Uruguayan President Luis Lacalle Pou pose for the family picture during the Summit of Heads of State of Mercosur in Puerto Iguazu, Argentina, on July 4, 2023. – AFP

Crunch time for EU-Mercosur deal at Rio summit

BRASILIA, Brazil: The fate of a long-awaited but controversial Europe-South America trade deal hangs in the balance this week when Brazilian President Luiz Inacio Lula da Silva hosts a summit of the Mercosur regional bloc.

The presidents of the Mercosur countries — Brazil, Argentina, Paraguay and Uruguay — will gather Thursday in Rio de Janeiro, with the clock ticking down on promises from both sides to finalize a trade deal between the bloc and the European Union by the end of the year. The meeting was originally supposed to seal a final version of the deal, which has been more than two decades in the making and would create the world’s biggest free trade zone.

But last-minute bickering has erupted in recent days, with public criticism of the proposed deal from France and Argentina. French President Emmanuel Macron, who met Lula on Saturday on the sidelines of the COP28 UN climate talks in Dubai, voiced his opposition to the deal, sharply criticizing supposed environmental shortfalls. Agricultural powerhouse Brazil, the world’s top exporter of beef and soy, notably faces accusations of tearing down the Amazon rainforest to make way for farming.

That chilled ties with Europe under far-right ex-president Jair Bolsonaro (2019-2022), who presided over a surge in deforestation. It is an image Lula is fighting. Since he took office for a third term in January, his government has halved deforestation in the Brazilian Amazon from last year. But Macron said the EU-Mercosur deal is “completely contradictory” with the anti-deforestation drive.

“It’s a patchwork deal (that)... doesn’t take biodiversity or the climate into account,” he said. Outgoing Argentine President Alberto Fernandez meanwhile said “current conditions” were not right to approve the deal as it stands. Fernandez is due to hand power on December 10 to self-described “anarcho-capitalist” Javier Milei, who criticized the accord during his presidential campaign and threatened to pull out of Mercosur.

A Brazilian foreign ministry source told AFP the Argentine presidential transition means Mercosur will likely be reluctant to make any big decisions on the accord at the Rio meeting. “But the new Argentine government has indicated its keen interest in closing” the deal, the official added, denying reports the South American bloc was pulling out of the negotiations. Lula accused France of “protectionism” after Macron’s criticism. “Let’s be clear on one thing,” he said. “Don’t say this is Brazil’s fault, don’t say it’s South America’s fault... If we don’t reach a deal, it will be clear whose fault it is.”

But he backed off talk of a possible breakdown in negotiations after meeting Monday with Chancellor Olaf Scholz in Germany, which firmly backs the deal, seen as key for its industrial sector. “I’m not giving up,” Lula said. The contours of the deal were agreed in 2019, but a final version still needs to be ratified. Tension has erupted on several issues, most recently a series of environmental protection demands issued by the EU. — AFP

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