Mercosur and the European Union: Either the agreement would be concluded now, or there would be no agreement, says Paraguayan President Peña | world

Paraguay’s President, Santiago Peña, said on Monday (25) in Asuncion that he will not hold negotiations on a free trade agreement with the European Union after December 6, when his country will assume the rotating presidency of Mercosur instead of Brazil.

“I asked Lula to complete the negotiations, because if he does not complete them, I will not continue them during the next six months,” Peña announced during a press conference at the official headquarters of the Paraguayan presidency.

He stated that the Mercosur summit, which includes Brazil, Paraguay, Argentina and Uruguay, will be held on December 6. On that date, Brasilia will hand over the rotating presidency of the bloc to Assuncao.

“I will devote the next six months to reaching agreements with other regions of the world and I am sure that we will reach an agreement very quickly,” the Paraguayan president said. He pointed out the possibility of discussing agreements with Singapore and the United Arab Emirates.

“The political decision is in the hands of the European Union”

Peña said that after 25 years of negotiations, it was time to “make a decision.” “Paraguay has a very strong desire for integration, and we are the most open country in Latin America, doing business with almost every country in the world,” he said.

He added, “But in this trade agreement, the matter is no longer a technical discussion, but rather a political decision, and this is not on the part of Mercosur, but on the part of the European Union.”

In an interview with the British newspaper “Financial Times”, the President of Paraguay said categorically: “Either we close before December 6, or we do not close at all.”

This ultimatum is in addition to the ultimatum issued by Lula last June, which gave until the end of this year to conclude the agreement between Mercosur and the European Union. “If there is anyone who can complete this agreement, it is Lula,” Peña said. “It will be this year or it will not be, and it will never be approved.”

Mercosur and the European Union agreed on the text of the agreement in 2019, but its conclusion was delayed due to the emergence of new demands.

The European Union introduced new environmental requirements in a letter sent in March, calling for the inclusion of more environmental obligations and penalties for non-compliance, which was not well received in Brasilia.

Pressure has grown in the European Union for more environmental guarantees from Mercosur during the government of Jair Bolsonaro, which has demobilized Brazil’s institutional apparatus to combat deforestation, but has also appealed to the protectionist interests of European farmers, critics say.

Moreover, in April the European Union approved its own anti-deforestation law, which bans the import of products from deforested areas after December 2020, a law that, according to Lula, “has extraterritorial effects and changes the balance of “Convention.”

The Brazilian president also opposes a clause in the agreement on government procurement, which would allow European companies to participate in public tenders in Mercosur countries on equal terms with local companies. According to the Brazilian, this would hurt small and medium businesses in Brazil.

Mercosur sent its response to the EU letter on September 13, and negotiators from the two blocs continue to seek an understanding.