November 28, 2020

Spain and Brazil will mediate to close the great trade agreement between the EU and Mercosur


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Brazil and Spain will mediate to pave the great agreement between the EU and Mercosur, which has been under negotiation for 20 years and is pending ratification, following the progress made in the last triennium.

The Brazilian Vice Minister of Economy and Foreign Trade, Roberto Fendt, was convinced this Wednesday that “the agreement will be signed soon.” This was indicated at the Brazil-Spain Forum organized by ABC, in which, together with Fendt, the Deputy Secretary General of the EU External Action Service participated, Stefano sannino; the Secretary of State for Foreign Affairs of the Government of Spain, Cristina Gallach; and the Director of Strategy and Corporate Affairs of Telefónica, Eduardo Navarro.

Fendt and Sannino participated electronically, while Gallach and Navarro did so in person at ABC headquarters, from where the forum was moderated by the columnist and flyer correspondent for our Latin American newspaper, Carmen de Carlos. The session was followed at ABC headquarters, among others, by the Ecuador’s Ambassador, Ricardo Scavone, by representatives of the EU office in Spain and the embassies of Argentina and the Dominican Republic, and by the CEO of Vocento, Luis Enríquez.

View of the hall of the ABC headquarters from which the Brazil-Europe Forum took place
View of the hall of the ABC headquarters from which the Brazil-Europe Forum took place – Angel of Antonio

Fendt stressed that the crisis unleashed by the pandemic makes the EU-Mercosur agreement even more strategic and necessary, as a tool for mutual economic development. “At this time it is even more important to favor the flow of goods and services against protectionist positions”, said the Brazilian vice minister. He assured that his Government is “working hard” to save the last obstacles in the negotiation between Mercosur and the EU, and insisted that it is necessary to accelerate the entry into force of the agreement: “International trade has proven to be one of the most effective tools generation of prosperity ».

The active involvement of Brazil to smooth the agreement from the Mercosur side –it is the largest economy in the Latin American common market– was also supported by the Spanish Secretary of State for Foreign Affairs and for Ibero-America and the Caribbean. Gallach recalled that Spain has a direct interest in this great agreement, due to the strong presence of Spanish economic interests in Brazil. He highlighted that there are more than 300 Spanish women settled there, with investments of 48,000 million euros.

“The EU-Mercosur agreement is fundamental for us,” said Gallach, who remarked that “there are obstacles that we must overcome after 20 years negotiating the agreement, the last three vibrant.”

Portuguese Presidency of the Council of the EU

The Secretary of State for Foreign Affairs was convinced that “the EU and the entire Ibero-American space” will agree to accelerate the final agreement at a particularly crucial moment, before the challenge of overcoming the crisis unleashed by the Covid. He affirmed that this pact would constitute a tool of great value to relaunch economies on both sides of the Atlantic, with “investment, trade, political and economic ties.”

The Brazilian Vice Minister of Economy and Foreign Trade, Roberto Fendt, on the screen, during one of his speeches
The Brazilian Vice Minister of Economy and Foreign Trade, Roberto Fendt, on the screen, during one of his speeches – Angel of Antonio

Gallach assured that the Government of Spain has actively worked together with the rotating presidency of the Council of the EU to smooth the EU-Mercosur agreement. He indicated that he has done so during the German rotating presidency that is now coming to an end, and advanced that the Spanish Government will act in the same direction next year, during the presidency of Portugal. In addition, it also showed Spain’s support for the entry of Brazil into the OECD, a process that the Government of Jair Bolsonaro is also working on and which, according to Roberto Fendt, they hope to achieve sooner rather than later.

EU: “There is room to be optimistic”

On the EU side, the Deputy Secretary General of the Foreign Action Service was prudent before the culmination of pact between the European Union and Mercosur, but claimed that “There is room to be optimistic”.

Stefano Sannino acknowledged that there are obstacles that still need to be overcome, in particular in the fulfillment of environmental criteria, sustainability and protection of indigenous peoples, which the European partners mark as a condition and which especially involve Brazil. But he considers that they are salvageable pitfalls, even more so given the “very strong interest” shared by “both the EU and the Mercosur countries.” The agreement – Sannino stressed – is a “Economic advantage for both sides” and affirmed that the EU values ​​the “positive steps” that Brazil has been taking to overcome European reluctance.

“In commercial agreements there are offensive and defensive interests, and we have to find a balance point between the two,” said Sannino regarding an agreement that would give the green light to a large commercial space that would move about 80,000 million euros a year.

Brazil, the great economic locomotive

Brazil is the great locomotive of the Ibero-American market, a giant of 212 million inhabitants, the fifth largest country in the world, the second largest economy in the entire American continent -Only behind the US-, the first trading partner and the largest foreign investment scenario in the EU, the world’s third largest exporter of agricultural products and the second largest oil reserve in South America.

Telefónica encourages the EU-Mercosur agreement

The power and economic opportunities of Brazil attested, in this ABC Forum, the Director of Strategy and Corporate Affairs at Telefónica, Eduardo Navarro. “The history of Telefónica, and especially the last 20 years, is not understood without its presence in Latin America and, in particular, in Brazil,” he said. The Spanish multinational has invested more than 30,000 million euros in the Brazilian market in the last 20 years and has 100,000 Brazilians as clients, half of the inhabitants of that country.

“There is no other company in any other sector that has invested so much in Brazil”, he indicated. And, from that privileged experience of Telefónica, Eduardo Navarro urged the completion of the EU-Mercosur agreement. “We have no doubt that any framework that allows for more intense collaboration between both sides will serve both sides very well.”.

After 20 years of negotiations, this senior Telefónica manager encouraged the parties to focus their efforts “on seeking reasons to close the pending items” of the agreement, instead of “looking for excuses for not doing so.”

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