Stay informed with free updates
Simply sign up to the EU trade myFT Digest — delivered directly to your inbox.
Brazilian leader Luiz Inácio Lula da Silva lashed out at French “protectionism” on Thursday in response to President Emmanuel Macron’s sharp criticism of a pending trade deal between the EU and the Mercosur bloc of South American nations.
The exchanges added to the last-minute setbacks the agreement — which has been 20 years in the works — has faced in the past week.
Lula said during a summit in Rio de Janeiro of Mercosur nations: “I appealed to Macron to stop being so protectionist [but] it’s not just a case of Macron. All of them [French presidents] are protectionist when it comes to their agricultural products.”
Diplomats from both the EU and South American group that includes Brazil, Argentina, Uruguay, Paraguay and new member Bolivia had hoped to announce the successful conclusion of the long-delayed “cows for cars” trade deal at the gathering in Rio.
But Argentine diplomats backed away from talks, saying they had lost their mandate to continue negotiations given the election of the new Javier Milei administration in Buenos Aires.
Then Macron earlier this month came out vocally against the deal, saying he opposed it and that it was “completely contradictory with what [Lula] is doing in Brazil and with what we are doing”.
“It’s a deal that was negotiated 20 years ago and which we’ve tried to mend, and which has been badly mended,” said Macron, adding he was concerned about the lack of environmental targets.
The comments frustrated EU and Mercosur diplomats.
Despite French opposition, however, diplomats involved in the negotiations say the deal is not dead and the new Argentine administration has signalled its interest in completing the treaty after it takes office on December 10.
“It’s just a matter of giving the new government in Argentina time to appraise the situation,” said a senior diplomat involved. “The new Argentine foreign minister came to Brasília and made clear that the new government would uphold closing the deal even now.”
“People were led to the conclusion that Macron’s statements had a direct impact on the negotiations, which they don’t. It was crafted for his domestic audience. The authority to negotiate these agreements is up to the [European] commission.”
Lula echoed the comments on Thursday, saying: “We need to keep trying to get this agreement done . . . I had a dream that in my presidency and that of [Spain’s] Pedro Sánchez, in the European Union, we could infer the negotiations.”
The leftwing leader also criticised a provisional 2019 version of the trade deal, negotiated by his predecessor Jair Bolsonaro. Lula said that agreement, which has since been substantially modified, “treated us as if we were an inferior, even colonised people”.
Negotiations this year were dominated by an EU demand for additional environmental commitments from South America. The Mercosur nations rejected this as protectionism from Europe, fearing competition from agricultural and wine exports.
Last month, diplomats involved in the talks said they hoped to overcome the issue by crafting a “middle-ground instrument” that would represent a compromise between both sides.
A joint EU-Mercosur statement released on Thursday said: “Considerable progress has been made in the past months. Negotiations continue with the ambition to infer the process and reach an agreement.”
Despite the setbacks with the EU, Lula hailed Bolivia’s official accession to Mercosur on Thursday as well as the bloc’s signing of a trade treaty with Singapore as “a sign that things continue to work”.
