Brazilian President Luiz Inacio Lula da Silva has warned he may abandon a long-awaited trade deal between members of the South American bloc Mercosur and the European Union after key countries sought a delay.
The Brazilian leader issued the threat on Wednesday after Italy joined fellow heavyweight France in saying it was not ready to commit to the pact to create the world’s biggest free-trade area.
The EU had expected its 27 member states to approve the deal in time for European Commission President Ursula von der Leyen to fly to Brazil to sign an agreement with the host, along with Mercosur partners Argentina, Paraguay and Uruguay, on Saturday.
“I’ve already warned them: If we don’t do it now, Brazil won’t make any more agreements while I’m president,” Lula told a cabinet meeting.
“We have given in on everything that diplomacy could reasonably concede.”
The deal, more than two decades in the making, has been keenly backed by economic powerhouse Germany, along with Spain and the Nordic countries, amid rising Chinese competition and recent United States tariffs, which have increased the incentive to diversify trade.
It would allow the EU to export more vehicles, machinery, spirits and wine to Latin America, and more beef, sugar, rice, honey and soya beans to flow in the opposite direction.
France, eager to protect its agriculture industry, had already called for a delay on a vote to approve the deal, and gained the support necessary to potentially block the agreement when Italian Prime Minister Giorgia Meloni said on Wednesday that Rome was also not ready.
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