Scholz, Lula push for EU-Mercosur trade deal amid tensions

German Chancellor Olaf Scholz welcomed Brazilian President Luiz Inacio Lula da Silva to Berlin on Monday for the first intergovernmental consultations between the two countries in eight years. 

The trip comes as Latin America and Europe's largest economies seek to revive ties, and with a pending free-trade agreement between the Mercosur economic bloc and the EU.

What the leaders said

"We are emphatically pushing for the deal to swiftly be concluded," Scholz said during a press conference following initial consultations.

"I call on everyone involved to be as pragmatic and as willing to compromise as possible so that we can finalize this," he added.

While the two blocs were expected to hold a summit on Thursday in the Brazilian city of Rio de Janeiro, final approval of a preliminary agreement has remained elusive. Germany's Frankfurter Allgemeine Zeitung newspaper on Monday reported that the EU team had canceled its visit after being informed that Argentina would not support the deal.

Lula pledged to "not give up" on the trade deal, but he also called on the EU to decide if it was really interested in sealing the agreement. 

"As long as I can believe that the agreement is possible, I will fight for it," the Brazilian president, who has accused wealthy countries of not wanting to make any concessions, said.

Germany, Brazil and the Mercosur-EU trade deal

The EU and the economic bloc Mercosur, comprised of Argentina, Brazil, Paraguay and Uruguay, have already agreed to the broad terms of a potential trade pact in June 2019 after two decades of tough negotiations, but the two sides have yet to finalize the deal.

Prior to the German-Brazilian government consultations, Lula alluded to the possibility of failure in the Mercosur talks.

"If there's no agreement, patience. It's not for lack of desire. The only thing that needs to be clear is that they no longer say it's because of Brazil. And that they no longer say it's because of South America," said Lula on Sunday. 

If passed, the Mercosur-EU deal would create one of the world's largest free trade zones with more than 700 million inhabitants.  

However, DW's chief political editor Michaela Küfner said the chances of a deal being signed in the next few days were "not terribly high."

"It's been 23 years in the making, and there is still plenty of resistance, not least from French President Emmanuel Macron," she said. 

Lula for his part said he had still "not given up on Macron."

The relationship between Scholz and Lula

For Lula, the trip is part of ongoing efforts to restore Brazil's standing on the global stage after a period of diplomatic isolation under his far-right predecessor Jair Bolsonaro.

Scholz and Lula met in January, just weeks after the Brazilian president succeeded Bolsonaro. The encounter was overshadowed by differences over Russia's invasion of Ukraine. 

Now the two leaders also hold opposing policies on the war between Israel and the militant, Islamist group Hamas. Lula last month said Israel's response to the October 7 terror attacks was "as grave" as the attacks themselves.

Scholz by contrast has continuously backed Israel and its "right to defend itself."

jcg/rt (Reuters, dpa, EFE)