Is Brazil's trade push doomed?

Brazil’s President Luiz Inácio Lula da Silva is pursuing ambitious trade agreements, although the current global context may complicate his efforts.

Lula is in Mexico this week to advance talks regarding a bilateral trade agreement and one with trade bloc Mercosur, comprising Argentina, Brazil, Paraguay and Uruguay.

"I want to say to fellow Mexican businesspeople, this year, God willing, we will close the agreement, Mercosur and the European Union. It is ready, and Brazil is ready to sign this agreement. The world needs this. The economy is a little atrophied all over the world. And we have a market for it," Lula said during the Brazil-Mexico Business Forum.

Regarding the bilateral agreement, Lula said: “I even think that our trade agreements need to be reviewed and redone as quickly as possible to improve life in Mexico and life in Brazil.”

But free trade is not as popular anymore.

"We have seen an increase in protectionist political forces in Europe, which makes it very difficult for an agreement between Mercosur and the European Union. It is not impossible to reach an agreement between the two blocs, but it is very difficult," José Augusto de Castro, president of Brazilian foreign trade association AEB, told BNamericas.

Regarding the bilateral agreement, he said: “Mexican businesspeople are very concerned about trade agreements with Brazil because this could give Brazil more access to the US, given the accord between Mexico and the US, generating more competition for Mexican industries.”

Lula acknowledged the concerns but highlighted that a trade agreement would give Mexican companies access to the Brazilian market.

"I know the importance of Mexico's economy for the US, and I know the importance of the trade relationship between Mexico and the US. But that doesn't stop fellow Mexicans from looking only to the north. Look a little, and you will realize that there are many possibilities in a country called Brazil, with 200 million inhabitants and a reasonably large GDP and reasonable participation in the [global] economy," said Lula.

Lula also took part in the swearing-in ceremony of President Claudia Sheinbaum.