EU-Mercosur Trade Deal; Brazil's Lula skips signing ceremony

CGTN Europe discussed this with Richard Lapper, author of upcoming book Lula: The Man, The Myth and A Dream of Latin America

Transcript

00:00Richard Lapper is author of Lula, The Man, The Myth, and A Dream of Latin America.

00:06He's an independent writer and consultant specializing in politics, economics, and business in Latin America.

00:12You know, we've had this growing drift towards a kind of unilateral approach towards international relations.

00:20This is a kind of welcome sign of cooperation, multilateralism.

00:25Having said that, this deal's been signed off, but it's not been ratified by European member parliaments.

00:34That has to happen.

00:36And my understanding is that at least two of those parliaments, France and Ireland, may well not approve it.

00:44So that although the narrower trade deal can go ahead, the broader trade economic cooperation agreement,

00:52which includes things like labor rights and environmental protection, that might fall.

01:00Talk to me about some of the details of this deal, because essentially we've got two different trading blocks

01:07with individual countries who have different agendas trying to come together to do good business,

01:14particularly in this environment where we're seeing increased tariffs from the United States, for example.

01:19Clearly, I think there's two really big takeaways in this.

01:25I mean, for Brazil and Latin America and Argentina, Paraguay, Uruguay, the smaller members of Mercosur,

01:34particularly for their agricultural sectors, this is a very big deal indeed,

01:39in the sense that it opens up a very significant new market.

01:43And all these countries have become very dependent on their China trade over the past 20 years or so.

01:51This gives them, you know, an extra dimension to their agricultural exports.

01:56So, you know, things like bigger beef quotas, potentially bigger pork quotas.

02:01They've got duty-free trade in things like fruit, instant coffee.

02:08These are all quite important sectors in South America, in the Mercosur area.

02:15And then on the other hand, for European car producers who've been under, you know, really on the rack,

02:22facing competition from China principally, this really gives them a helping hand in terms of expanding their markets.

02:32So I think that, you know, companies like BMW, Volkswagen have really been pressing for this kind of initiative to open up their market.

02:42I mean, Brazil in particular, a very big market for cars,

02:45which increasingly over the past few years has become dominated by the growth of Chinese electric vehicles.

02:57Do you read any significance into the fact that Brazil's president didn't attend the signing ceremony?

03:04Look, I mean, I think, I think it's, it's, I think Lula's taking a step back from some of his efforts to rebuild his international profile.

03:20The big, the big priority for Lula at the moment is domestic politics and his efforts to win a fourth term at the elections in October.

03:33It's cool. He's in the lead at the moment. He's been helped by the Trump tariffs to which he's been able to win popularity by opposing those

03:45and by very cleverly negotiating a reduction. And Lula's popularity is reasonably strong.

03:55He's ahead in the polls. And I think it's, but it's a complex political scenario in Brazil.

04:01So I think really he's, it's, it's more a question of giving his domestic agenda greater priority.