Lula’s victory in Brazil would unlock an agreement between the EU and Mercosur

Lula has a more intense environmental policy, which could bring the pending agreement between the European Union and Mercosur closer. Lula has the vision of a more international Brazil but as a bloc, as the leader of the region.”

ID Consultant

The return of Luiz Inácio Lula da Silva to the presidency of Brazil awakened in Argentina a flow of hope in economic terms, not only in the ruling party, but also among powerful opposition cadres.

In addition, according to a report by Marcelo Elizondo, a consultant DNI, “Lula would adhere to the Paris environmental pact, with a more intense environmental policy, which could bring the pending agreement between the European Union and Mercosur closer together. Like Bolsonaro, Lula has the vision of a more international Brazil, but, in contrast, Lula will do it as a bloc, as the leader of the region”.

Although it is clear that Brazil will not save Argentina, there is consensus on the possibility of creating an agenda that has been absent until now; Despite the efforts of Foreign Minister Daniel Scioli to maintain a good relationship and improve the trade balance, in the first nine months of the year the exchange reached a deficit of more than 2,100 million dollars. 30 years ago, when Mercosur was formed, Brazil became the “great partner” and, currently, the largest market for Argentine exports with more than 8,000 million dollars so far this year, which can close at 12,000 million. , in December. The figure doubles exports to the other two largest markets China and to the US, according to the report.

In addition, Brazil and China are the main Argentine suppliers, with more than 11,000 million dollars so far in 2022; but, fundamentally, Elizondo pointed out that the southern giant “is the great destination for exports of Argentine SMEs and industrial products.”

Argentina currently accounts for less than 5% of Brazil’s imports, when at the beginning of the 2000s it represented 12 percent. The bilateral relationship is not only interesting in terms of the exchange of goods and supplies, Brazil is the fourth largest generator of Foreign Direct Investment (FDI) with around 6% of the stock and, in addition, it is the main issuer of receptive tourism to the country: a 22% of the total of more than 2 million foreigners who enter the country each year, by land and air, are Brazilian.

But there is more, the “transitive” character of the Brazilian economy in relation to Argentina. “Brazil is a partner that can facilitate Argentine access to a virtuous internationalization, to the extent that each year it is one of the main recipients of foreign direct investment in the world,” the DNI study specifies.