The EU wants environmental guarantees in case a future Brazilian government stops trying to protect the Amazon
Brazil will push the European Union for better trading terms in return for offering environmental guarantees over the protection of the Amazon rainforest, according to a diplomat with knowledge of the EU-Mercosur trade deal negotiations.
Brazil felt targeted by a “side letter” added this year to the trade deal struck in 2019, adding environmental guarantees to the original accord, they said. The new Brazilian government of President Luiz Inacio Lula da Silva, who has made bold pledges of environmental stewardship in contrast to his predecessor, has taken its time to come up with a response.
But the South American trade bloc Mercosur will prepare its counterproposal this weekbefore meeting with EU negotiators in August in the hopes of closing the accord by the end of the year, two Brazilian diplomats told Reuters.
The sources said Brazil would also seek new exceptions to opening government purchases for foreign firms in the health industry, public-sector construction and green technology.
Brazil’s Foreign Ministry and the EU declined to comment.
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The Europeans drafted the side letter in response to Brazil’s far-right former President Jair Bolsonaro, who undercut environmental protections, allowing deforestation to soar. Since coming to power at the start of the year, Lula has improved Brazil’s environmental policy, but European diplomats say the EU still needs guarantees against a relapse.
Brazil fears the addendum could lead to trade sanctions. Its diplomats complain that the new rules go beyond the Paris climate agreement.
“There are new obligations that are unacceptable. If sanctions are applied, we want other concessions to compensate,” the diplomat said, requesting anonymity ahead of sensitive negotiations.
The EU recently passed a law banning six imported products if linked to deforestation, which Brazilian exporters and government officials saw as a protectionist move.
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