Paraguayan President Threatens EU with Ultimatum Over Mercosur Trade Talks

Written by Joseph Cain | October 1, 2023

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On September 25^th, recently elected Paraguayan President Santiago Pena announced that he would cease trade negotiations between Mercosur—a South American regional trade block made up of Argentina, Brazil, Paraguay, and Uruguay— and the European Union (EU) if a deal is not reached by December 6^th, 2023, when Paraguay takes over the presidency of the block. President Lula da Silva of Brazil recently had conversations with the Prime Minister of Vietnam and indicated that the Vietnamese would be interested in a trade deal with Mercosur. In July, President Lula had also suggested that Mercosur should explore trade talks with China, Indonesia, and countries in Central America and the Caribbean. President Pena also noted that if a deal could not be met with the Europeans, then Mercosur would look to Asia instead.

EU-Mercosur trade talks have been ongoing for two decades and finalization of the deal has been held up by added EU demands about environmental concerns and necessary safeguards, even as a treaty was agreed upon by both blocks in principle in 2019. Mercosur has complained that these new requirements represent a protectionist agenda by the EU aimed at safeguarding EU beef and wine producers from Mercosur exports. Other countries that have ongoing trade talks with Mercosur include Canada, South Korea, and Singapore.