Brazil election: A chance for a new start under Lula?

Luiz Ignacio Lula da Silva, 77, on Sunday secured a narrow but clear victory over incumbent Jair Bolsonaro in a bitterly fought presidential race.  

The veteran leftist Lula received 50.9% of the vote in the runoff, while his right-wing populist challenger got 49.1%.

After a tough election campaign, which at times featured overly aggressive rhetoric, Lula — who had previously served as president from 2003 to 2011 — gave a first, albeit still superficial, glimpse of his what his third term in office might look like.

Now analysts are waiting to see who will determine the country's economic policy under the new president. "The definition of the team for the economy will be fundamental to reassure the markets," Brazilian newspaper Estadao wrote.

Lula signals willingness to negotiate

Lula signaled a willingness to negotiate with Europe, but made it clear that the treaty on an EU-Mercosur free trade agreement, which is ready to be signed, would have to be renegotiated.

"We have no interest in trade agreements that condemn our country to the eternal role of exporter of goods and raw materials," he said.

Mercosur is a regional association of five South American countries aimed at closer economic integration in the region.

Instead, the goal is to reindustrialize Brazil.

Roberto Goulart Menezes, professor at the University of Brasilia's Institute of International Relations, agrees with this approach.

"The future Lula government must reevaluate the terms of the agreement between Mercosur and the European Union, focusing on the issue of industry," he told DW. "In my opinion, Lula should try to proceed together with Mercosur and work out his own line to make the treaty more balanced."

What's the biggest challenge?

Menezes believes, however, that the biggest obstacle to the deal has been removed with Lula's election.

"The central issue that prevented ratification by the European Union — the environmental issue — is being overcome," he said.

During the election campaign, Lula had promised to put an end to deforestation in the Amazon rainforest, something no Brazilian president has so far been able to achieve.

The EU, as well as the German government, made verifiable progress and verifiable environmental standards a prerequisite for the ratification of the agreement.

Holding agribusiness accountable

Menezes said Lula has been actively engaging with the governments of France and Germany. But a change in mindset at the top of the incoming Brazilian government alone would not be enough, he thinks.

"Brazilian agribusiness must support the new government's environmental measures, and Lula must separate those destructive agribusinesses that deforest the Amazon and other ecosystems from those that actually comply with labor and environmental standards," he argued.

The agricultural industry urgently needs the coordination that the Lula government is seeking with the EU, the expert noted, and pointed out that China — Brazil's biggest trade partner — will work with the new government to help with the energy transition. "I believe Lula will bring former Environment Minister Marina Silva back to this post to break the global blockade against Brazil," he said.

In his first speech after the election, Lula stressed that the Brazilian people want a good life, good jobs with rising salaries, and good quality public education and health.

To achieve those goals, the incoming president can rely on the record profits recently posted by the nation's contentious agribusiness industry, as well as the semi-state-owned oil major Petrobras.

The article was originally published in German.