South American trade bloc Mercosur holds summit for EU trade deal

July 3, 2023 9News Nigeria Europe 0

The aim is to breakdown the last obstacles in a trade agreement between the EU and the South American trade block, Mercosur.

Made up of Argentina, Brazil, Paraguay and Uruguay, this regional bloc reached an deal in principle with the EU in 2019 after two decades of negotiations. 

However, the concerns of some European governments about environmental protection, especially in the Amazon jungle, have paralysed the agreement. 

The EU has proposed a “side letter” to the agreement, with extra environmental guarantees, rankling South American leaders and slowing down progress to notching a final agreement.

Mercosur represents 62% of South America’s population and 67% of the continent’s gross domestic product.

Brazil’s Luiz Inacio Lula da Silva has led the criticism of the EU’s environmental demands, telling reporters last month that “strategic partners should have a relationship of mutual trust, not mistrust and sanctions.”

The meeting in Puerto Iguazú takes place two weeks after the start in Brussels of the first EU-Latin America summit in the last eight years. 

The Spanish presidency of the EU is seen as an opportunity to definitively conclude an ambitious pact with a market of 260 million consumers.