Brazil’s Lula upbeat on EU-Mercosur deal, calls for peace in Ukraine

BRUSSELS — Brazil’s President Luiz Inácio Lula da Silva raised hopes on Wednesday that a landmark EU-South America trade deal can be finalized this year, but stuck to his more ambiguous line on Russia’s war against Ukraine.

Reaching a common position with Latin American countries that condemns Russia’s invasion is a priority for EU leaders, as the bloc hopes to strike a major trade and political cooperation agreement with the Mercosur bloc that comprises Argentina, Brazil, Paraguay and Uruguay.

Speaking to reporters in a hotel conference room following a two-day EU-Latin America summit, however, Luiz warned that “the world is getting tired” of the war and said that “a path toward peace” must be found.

For the moment “neither [Ukrainian President Volodymyr] Zelenskyy nor [Russian President Vladimir] Putin want to talk about peace now because they both think they can win,” Lula said. He reiterated his proposal to create a peace-oriented club of nonaligned countries first made in January.

“We have discussed this with China, with Indonesia” and other Latin American countries “to construct a group of countries that is capable, in a certain moment, to convince Russia and Ukraine that peace is the best way to go,” Lula said. He argued that the geographical distance that these countries had to the war put them in a better position to mediate between Moscow and Kyiv.

The Brazilian president’s calls for peace between Russia and Ukraine have previously met with criticism from other leaders such as German Chancellor Olaf Scholz, who warned in May that Putin should not keep control over occupied Ukrainian territories. Such a solution would “merely legitimate Putin’s raid,” Scholz said, adding that the withdrawal of Russian troops was a precondition for a fair peace.

Responding to that criticism, Lula said “the withdrawal of soldiers is part of a peace deal,” adding that Brazil had voted in favor of a U.N. resolution condemning the Russian invasion.

Time to trade

Turning to the negotiations on the EU-Mercosur agreement, which have been going on for 24 years but are now in the home stretch, Lula criticized the EU’s environmental demands. Still, he voiced hope that a deal could be struck this year.

“I’m very much optimistic, for the first time, that we will manage to conclude this agreement,” he said. “It would be very good if we got this agreement under the Spanish presidency [of the Council of the EU] and the Brazilian temporary presidency of Mercosur.”

Earlier this year, EU countries presented a side letter to the Mercosur countries that seeks to increase the trade deal’s commitments to protect the climate and stop deforestation.

Lula blasted that attempt on Wednesday: “Europe wrote an aggressive letter … that threatened us with sanctions and punishment if we do not fulfil [certain conditions],” he said.

“We told the EU that two strategic partners do not discuss through threats but with proposals,” and added: “In two weeks or three weeks from now we will deliver our counterproposal to the EU.”

Lula also indicated that he’s keen to seek some sort of tradeoff with the EU, particularly on public procurement concessions under the deal that would open up public contracts in the Mercosur countries, such as infrastructure projects, to big European companies.

He said that these market-opening clauses may need to be altered to better protect South American companies: “Why should a country … make such a concession to kill our small and medium enterprises, to kill the possibilities of new entrepreneurs?” he asked. “We have an interest to reindustrialize Brazil.”

Lula also issued a veiled threat that, if the EU and Mercosur were not able to reach a deal, there are other potential partners like China to which South America could open up. “If Europe does not want to make investments, there are other countries that do want to make investment,” he said.