Brazil who is handing the Mercosur rotating chair to Paraguay during a ceremony and regional summit in Rio do Janeiro next 7 December´, is working overtime to finalize important milestones for the trade block during its presidency, among which discussions with UAE, closing a deal with Singapore, making official Bolivia's incorporation and equally outstanding even possibly signing the definitive agreement with the European Union.
The signing of the agreement with Singapore is already on the summit agenda, a great advance since it is the first reached with a Southeast Asian country, allowing for the expansion of trade and investment with a hub that is center piece of the most dynamic economic area of the globe.
As to Bolivia's incorporation as full member of Mercosur, formalities are in the process of completion: the Brazilian senate approved the treaty earlier this week, and it has all been arranged for the Bolivian parliament to make the official approval during the regional summit next week in Rio. Bolivia will thus become the sixth member of Mercosur, together with Argentina, Brazil, Paraguay, Uruguay and Venezuela currently suspended for its repeated disruption of the democratic institutions and order.
But as Valor Economico points out, the trade and cooperation agreement with the European Union after more than two decades pending, has been recently beginning to move under Brazilian impulse and positive prospects from the incoming Argentine government, decisively in favor of open markets and free trade.
In effect European negotiators who are in Brazil have held meetings in Brasília and a new round is scheduled in Rio. “It will be days of intense mobilization in the technical area and at the highest political spheres,” revealed a Brazilian diplomat.
The trade agreement with the European Free Trade Association (EFTA, formed by Switzerland, Norway, Iceland, and Liechtenstein) is also expected to be finalized. Due to the concentration of efforts on negotiations with the EU, the signing may be postponed and take place under the presidency of Paraguay, which takes over the bloc during the summit. Discussions on other free trade agreements are also planned, including the United Arab Emirates.
As to more internal issues of the block, Brazil is expected to settle most of its debts to Mercosur institutions, in particular the payment of more than US$ 90 million to the Structural Convergence Fund for Mercosur (FOCEM), a joint financing mechanism for member countries that aims to reduce asymmetries and promote the weaker economies.
During the previous administration of president Bolsonaro, Brazil suspended debts and commitments with various international organizations, given its erratic foreign policy and disregard for Mercosur and lack of chemistry with some regional leaders..
Another important factor in the current equation has been president elect Javier Milei’s victory in Argentina, which prompted Lula da Silva to intensify efforts to conclude the agreement with the European Union during Brazil’s Mercosur presidency.
During a visit to Brazil over the weekend, the future Argentine foreign minister, Diana Mondino, (and despite Milei having labeled Lula da Silva a 'communist'), gave assurances that the incoming administration is interested in the agreement and will not stand in the way of the process.
“The new Argentine government supports this effort and we are now working intensively with Spain that currently holds the presidency of the European Union,” said Ms Mondino. Allegedly the future minister also presented Lula with a personal invitation to attend Milei's taking office ceremony, who had anticipated he was offended because he had been accused of being a 'communist' .
However it´s not a trail of roses since European countries continue questioning environmental issues, which had been holding up the conclusion of the agreement. Still on the agenda are discussions about the criteria that will be adopted to comply with the European anti-deforestation law, which bans the import, from the end of 2024, of commodities grown in recently cleared forest areas.