Brazil, Spain seek progress on Mercosur-European Union agreement

President Luiz Inácio Lula da Silva on Wednesday (Mar. 6) welcomed Spanish President Pedro Sánchez, who is on an official visit to Brazil, at the Planalto presidential palace in Brasília. During the meeting, bilateral agreements were signed in the areas of communications; science, technology, and innovation; public administration, and health. Lula and Sánchez expressed their intention to expand political, commercial, and investment relations.

The two leaders are set to advance negotiations on the agreement between Mercosur and the European Union (EU). According to Sánchez, Spain does not pose a problem for the conclusion of the agreement, which he hopes will soon come into force. He believes that, following the war in Ukraine, which impacted Europe's energy supply, European countries have learned the lesson that they need to diversify and find new trade partnerships.

"I would like to thank President Lula for his leadership in advancing this agreement. It is an initiative that strengthens our trade and investment ties and contributes to social and environmental benefits. Latin America and the European Union are natural allies," said Sánchez, also highlighting the common vision of Brazil and Spain in defending issues such as social justice, a green and just transition, and international cooperation with a reformed financial system.

Lula pointed out that one of the obstacles to finalizing the Mercosur-EU agreement comes from France, which is protectionist regarding agricultural interests. "It is no longer a matter of willing to or liking it; politically, economically, and geographically, we need to make this agreement and send a signal to the world that we need to move forward," Lula noted.

Approved in 2019 after 20 years of negotiations, the Mercosur-EU agreement needs to be ratified by the parliaments of all the countries in the two blocs to enter into force. The negotiations involve 31 countries. The agreement covers both tariff and regulatory issues, such as services, public procurement, trade facilitation, technical barriers, sanitary and phytosanitary measures, and intellectual property.

Investments

Sánchez's agenda is focused on European investments in Brazil and includes a visit to the state of São Paulo on Thursday (7). After their bilateral meeting at the Planalto presidential palace on Wednesday (6), Sánchez and Lula participated in a gathering with Spanish businessmen, led by Brazil's vice-president and Minister of Development, Industry, Trade, and Services, Geraldo Alckmin.

According to the Brazilian Ministry of Foreign Affairs, the volume of Spanish investment in Brazil is significant. "By the criterion of ultimate controller, Spain has established itself as the second largest investor in the country [behind the United States], with a presence in the energy, banking, telecommunications, and insurance sectors, among others."

More than a thousand Spanish companies are present in the Brazilian market, such as Telefónica and Banco Santander. The European country's total stock of investments in Brazil is estimated at $59 billion, with annual inflows of around $3.3 billion in recent years.

"Brazil is a very attractive destination for Spanish companies, especially those involved in energy transition and in combating and mitigating climate change," said Sánchez, highlighting the actions of the Brazilian nation to ensure political and economic stability, such as the approval of the fiscal framework and tax reform.

President Lula stated that Brazil possesses many positive attributes that have successfully attracted interest from international investors. He highlighted Telefónica and Santander as examples, noting that these companies have already invested in Brazil and that many others are eager for the opportunity to do the same.

Political relations

Pedro Sánchez also highlighted the consolidation of the political relationship and permanent dialogue between Brazil and Spain. For the Spanish president, the two countries must "continue to stand firm in defense of democracy and protect it against extremism, such as the events of January 8 [2023]" in Brasília. On that occasion, vandals invaded the headquarters of the Three Powers in the federal capital in an attempt to stage a coup d'état.

Lula said that Brazil and Spain are facing "extremism, the denial of politics, and hate speech, fueled by fake news." "Our experience in confronting the extreme right, which acts in coordination internationally, teaches us that all democrats must unite. We cannot compromise with totalitarianism, nor allow ourselves to be paralyzed by perplexity and uncertainty in the face of these threats," Lula noted.

For the Brazilian president, the defense of democracy is "inevitably" linked to the fight against all forms of exclusion. Lula cited cases of racism, such as those involving Real Madrid's Brazilian player Vinicius Júnior.

"Brazil and Spain have experienced episodes of racism, racial discrimination, and xenophobia, including in high-profile sports. Only an inclusive social project will allow us to build prosperous, free, democratic, and sovereign societies," said Lula.

In addition to the bilateral agenda, the heads of government addressed issues such as the reform of the governance of multilateral institutions and other global issues, including the crisis in the Middle East, particularly the serious humanitarian situation in Gaza and the prospects for progress toward a two-state solution, and the conflict between Russia and Ukraine.

After the events at the Planalto palace, Sánchez was received by Lula for lunch at the Ministry of Foreign Affairs Palace, attended by various authorities, such as the president of the Federal Supreme Court, Luís Roberto Barroso. The Spanish president was also welcomed in the National Congress by the heads of the Senate, Rodrigo Pacheco, and the House of Representatives, Arthur Lira.

In April last year, Lula made an official visit to Spain, when agreements were signed for cooperation in the areas of education, labor, and scientific research.