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EU Commission chief Ursula von der Leyen shakes hands with Brazil's President Lula da Silva in Brasilia.
EU woos Latin America
First, negotiations to ratify a free trade agreement between the EU and Mercosur, a South American trade bloc, remain stalled. The pact was signed in 2019, but Germany and France still have reservations about Amazon deforestation, which Brazil and Argentina say is unfair and based on mistrust. Meanwhile, Europe is fast losing trade clout to China in Latin America, which could supply many of the critical minerals the Europeans need to depend less on China.
Second, the EU and most of Latin America don't see eye-to-eye on Russia's war in Ukraine. While virtually all of Europe is in the tank for Kyiv, Brazil and Mexico prefer to remain neutral. Summit-loving Ukrainian President Volodymyr Zelensky won't be this week in Brussels, where the Europeans will likely hear that they should focus less on doling out weapons to Ukraine and more on pressing Zelensky to negotiate with Russia.
The EU wants to convince Latin America that the two blocs are natural partners. But a stalled trade deal and political bickering over Ukraine are no harbingers of warmer ties to come.
Brazil's President Luiz Inacio Lula da Silva and Portugal's PM Antonio Costa during a press conference in Lisbon.
Brazil & EU tussle over war but want to talk trade
On his first European trip since taking office in January, Brazil's President Luiz Inácio Lula da Silva was hoping to win final support for a free trade agreement between the EU and Mercosur (Argentina, Brazil, Paraguay, and Uruguay) that’s been stuck since 2019. So far, he’s been booed in Portugal for his controversial remarks on the war in Ukraine following a visit to China, but he doubled down on this rhetoric in Lisbon over the weekend.
Still, neither Lula's position nor the European backlash to his Ukraine balancing act is the real story here. The bigger issue is whether the EU and Mercosur will ever sign on the dotted line amid troublesome LatAm politics and Green jitters across the pond.
Lula is worried that if he waits too long to close the deal on Brazil's terms, the fast-approaching October election in Argentina could soon start to complicate things, not to mention Uruguay pursuing a separate FTA with China. For their part, France and Germany seem to have given up their reservations about Amazon deforestation during the Bolsonaro years, but environmentalists in Europe remain skeptical of Lula walking the talk.
When the Brazilian president meets Spanish PM Pedro Sánchez on Tuesday, don't be surprised if they talk more about trade than war. After all, Lula is still eager to trade more with the EU, and Spain takes over the EU presidency in July.