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The Mercosur-European Union agreement, under negotiation for 25 years, could be the key to boosting the Brazilian economy and facing global challenges. However, French resistance, political instability and economic impacts generate uncertainty. Find out what is at stake for Brazil and the world.
A historic negotiation involving two gigantic economic blocs could finally come to fruition.
But not everything is a celebration: while some see the agreement between Mercosur and the European Union as a promising path for the Brazilian economy, others point to political, environmental and commercial challenges that could compromise its implementation.
After 25 years of negotiations, Mercosur and the European Union are about to announce what could be one of the biggest trade pacts in history.
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The agreement, which provides for the reduction of tariffs and the facilitation of investments between the two blocs, promises to create an integrated market for 700 million people, according to the President of the European Commission, Ursula von der Leyen.
According to information from the BBC Brazil, the official announcement should be made this week during the Mercosur Summit, in Uruguay, with the presence of President Luiz Inácio Lula da Silva and leaders of other South American countries.
If implemented, the agreement will represent a significant political victory for the Lula government, especially after the impasses that marked previous years, such as the freeze that occurred during the Jair Bolsonaro government due to tensions with European powers.
However, there is a long journey before the treaty enters into force. A France, a major opponent of the pact, it leads a coalition of countries that question the impacts of the agreement, especially in the agricultural sector.
Political resistance and challenges
The French government, led by Emmanuel Macron, is one of the most vocal critics of the agreement. The main concern is related to competition in the agricultural sector.
French farmers fear losing ground to South American products, produced with less stringent environmental and health standards.
Recently, Carrefour, one of the largest supermarket chains in France, announced that it would stop buying meat from Mercosur, but backed down after criticism.
This opposition reflects not only economic interests, but also internal political issues in France, which is experiencing a moment of instability with a divided Parliament and early elections that have strengthened the radical right.
Experts interviewed by BBC Brazil believe that the French resistance also has geopolitical roots.
The advance of external influences, such as China and Russia, in South America, puts pressure on European countries to strengthen ties with Mercosur.
However, Macron faces domestic and international pressures that make unanimous approval within the European Union difficult.
Donald Trump's role on the global stage
Another factor that could influence the decision is the return of Donald Trump to the presidency of the United States.
Known for his protectionism, Trump promised to impose new tariffs on foreign products, which could encourage Europe and Mercosur to seek strategic alliances to face the economic impacts.
For Cairo Junqueira, professor at the Federal University of Sergipe, “Trump’s election could serve as a catalyst for the approval of the agreement, just as it did in 2019, when it was first signed.” Geopolitics, therefore, plays a crucial role in enabling the treaty.
Economic benefits and concerns for Brazil
In Brazil, the agreement divides opinions. A study by the Institute of Applied Economic Research (Ipea) points out that the pact could increase Brazilian GDP by 0,46% by 2040, which is equivalent to US$9,3 billion per year.
Furthermore, Brazilian exports to Europe are expected to grow, especially in sectors such as commodities, while European products such as vehicles and medicines will become more affordable for Brazilian consumers.
On the other hand, unions and labor organizations, such as the Central Única dos Trabalhadores (CUT), fear that the reduction in tariffs will harm national industry.
“Brazilian companies may not be as competitive as European ones, leading to factory closures and job losses,” alerts a statement from the entity.
The National Confederation of Industry (CNI) has adopted a more optimistic tone. In a document released in November, the CNI argued that trade integration is essential to strengthen the Brazilian economy and ensure its resilience in times of global crises.
Approval steps and bureaucratic obstacles
Even if the agreement is officially announced, it needs to go through a long and complex process to come into effect.
On the Mercosur side, approval by the parliaments of Brazil, Argentina, Paraguay, Uruguay and Bolivia is sufficient.
In the European Union, however, the scenario is more complicated. The pact must be approved by two bodies: the Council of Ministers and the European Parliament.
Subsequently, it may need the approval of all 27 national parliaments, which represents a significant challenge.
“Without unanimous approval, the agreement is unlikely to be fully implemented,” says Carolina Pavese, specialist in International Relations.
Conclusion: what is at stake?
If approved, the Mercosur-European Union agreement will not only strengthen the economies of both blocs, but could also reposition Brazil as a global economic power.
However, internal resistance in Europe, environmental challenges and political uncertainties make the future of the pact uncertain.
The big question remains: is Brazil prepared to make the most of this historic opportunity, or will the obstacles be insurmountable? Leave your opinion in the comments!
