Lula da Silva wants Mercosur to close a deal with the EU before negotiating with China

Brazilian President Luis Inácio Lula da Silva deemed it “urgent” on Wednesday that Mercosur close a deal with the European Union (EU) before negotiating with China. He did so during a visit to Uruguay, which is carrying out trade negotiations with Beijing on its own and generating turmoil among the bloc’s partners.

During his stay in Montevideo after attending the CELAC summit in Buenos Aires on Tuesday, Lula also winked at the opposition organizing meetings with former president José Mujica (2010-2015) and other figures of the left-wing coalition Frente Amplio (FA).

But one of the key parts of his visit was related to the future of the blockade. “It is urgent and extremely necessary for Mercosur to reach an agreement with the EU”Lula urged after meeting with his Uruguayan counterpart Luis Lacalle Pou. “We will intensify our discussions with the EU and sign that agreement so that we can immediately discuss an agreement between China and Mercosur,” added the visitor, who arrived at the presidential residence accompanied by his wife Rosangela.

Uruguay has started negotiations with Beijing and asked to enter the Trans-Pacific Agreement without the consent of its Mercosur partners, generating tensions and warnings from Brazil, Argentina and Paraguay that the bloc could break. But Lacalle Pou was clear in emphasizing that “we belong to Mercosur and we have that unchanged vocation”.

An example of these tensions also came from Lula’s foreign minister, Mauro Viera, who said that an agreement between Uruguay and China would “destroy” Mercosur for having contradicted the bloc’s integration policies. “If it is negotiated outside the Common External Tariff, it destroys the tariff; Nobody cares about destroying Mercosur,” Viera said in an interview with the newspaper Folha de São Paulo.

For years, the Montevideo government has been asking Mercosur for greater flexibility, in addition to trade opening, a request that Lula considered “more than fair” during his visit yesterday. “It is right to want to produce more and want to sell more. This is why openness is important”, he pointed out, when he said he “totally agrees” to renewing “everything that is necessary” at Mercosur “.

Despite the “optimism” expressed by Lacalle Pou after meeting Lula, stresses within the block are installed. The partners have clarified that the Uruguayan position of promoting agreements with third parties violates the founding statutes of Mercosur, created in 1991, and have even threatened Montevideo with legal and commercial measures.

Uruguay believes that Argentina and Brazil have also violated the statutes with the adoption of measures such as reductions in the Common External Tariff and argues that other foundational postulates, such as the creation of a customs union or a common market, have not been respected.

After meeting Lacalle Pou, Lula went to meet the mayor of Montevideo, Carolina Cosse, one of the leading figures in the FA. The Brazilian received a medal for his contribution to the environment from Cosse, in a public ceremony from the balcony of the Municipality.

Later, Lula went to the farm of his friend José Mujica in Rincón del Cerro, where the president of Brazil and his wife, Rosangela, embraced Mujica and his wife, former senator and former vice president Lucía Topolanski.

Away from the press, they sat talking under a green and red awning in the garden in front of the farmhouse. Next, Lula and Mujica took a tour of the property in the former president’s old Volkswagen Beetle.

After the meeting, former president Mujica told reporters that Lula “is in a very difficult game” after the January 8 uprising in Brasilia, and that he is “bitter” about “the situation in his country”.

On regional integration, he underlined that “many things must be done that must not separate us between left, right and centre” because otherwise “we are on the ballot (we are dead)”. He also called for “improving Mercosur”.

According to the Montevideo newspaper The observerMujica hinted at the Mercosur discussion and stated that “we (for Uruguay) are on the side of a monster that has accumulated problems”.

In his press conference following his meeting with the Brazilian president, Mujica acknowledged this Uruguay “needs to trade”, but urged to be careful because “it has to take care of what it has in its neighbourhood”.

“Uruguay -exemplified Mujica- has Tarzan’s challenge: ‘When it grabbed a vine and wanted to take another, it couldn’t leave [la primera] until I got caught” in the second, he mused.