Brazilian President Luiz Inácio Lula da Silva criticised a "lack of flexibility" from European countries Thursday as the EU and South American bloc Mercosur announced they needed more time to finalise a massive trade deal.
Lula's government had hoped a summit this week of the Mercosur countries – Argentina, Brazil, Paraguay, Uruguay and soon Bolivia – would put the final seal on the deal, which has been under negotiation for more than 20 years and would create the world's biggest free-trade zone.
But the final stretch has been complicated by drawn-out haggling over environmental demands from the EU, which wants guarantees South American agricultural exports are not produced by damaging the Amazon rainforest or other key ecosystems.
"There's still major resistance from Europe. Their lack of flexibility is strange," Lula said at the summit in Rio de Janeiro.
He criticised the "protectionism" of French President Emmanuel Macron, who voiced his opposition to the deal in its current form after meeting with Lula Saturday on the sidelines of the COP28 UN climate talks in Dubai.
Lula said he had asked German Chancellor Olaf Scholz, whom he met in Berlin on his way home from Dubai, to "appeal to [Macron's] heart."
Germany firmly backs the proposed deal, seen as key for its industrial sector.
Lula urged his fellow leaders to "keep trying."
Shortly after his remarks, the EU and Mercosur issued a joint statement saying they are "engaged in constructive discussions."
"Considerable progress has been made," they said, adding "both parties hope to promptly achieve an agreement" – but without giving a timeline.
The Mercosur summit is due to wrap up with Bolivia's formal inclusion as a member of the bloc, after the founding members all green-lighted the key natural gas and lithium producer to join.
But the group, which has struggled to coordinate policy, faces an uncertain future -- even more so after Argentina's libertarian president-elect, Javier Milei, who has sharply criticised Mercosur, takes office Sunday.
"Both Milei's arrival and the failure of the EU deal raise doubts about the bloc's future," Bruno Binetti, an international relations specialist at the London School of Economics, told AFP.