A historical partnership threatened
Relations between the EU and Brazil had been gradually improving since the 1960s, expanding from economics to politics and technology. However, protectionism from both sides and the management of the Amazon rainforest brought cooperation to a halt.
The Story in 100 Words
After independence in 1822, Brazil nurtured positive relations with Europe. Yet, the creation of the European Economic Community (EEC) in 1957 distanced Europe from Latin America. The oil crisis and the EU emergence turned the European gaze back to the New World.
The 21st century provided an environment for deals between the regions. The agreements explored uncharted territories, such as science and security. In 2007, they originated a strategic partnership with yearly summits.
Bolsonaro's election in 2018 compromised some gains. After his clash with Macron over the Amazon rainforest, Bolsonaro could raise tariffs and undermine cooperation between Europe and Mercosur.
500 Word
Brazil was one of the first to recognize the EEC, but it was not thrilled by its creation, fearing a rise in trade tariffs. At the time, Germany and Italy were the main importers of Brazilian goods, so economic relations were fractured. Moreover, Brazilian attempts to protect its agricultural exports during GATT meetings were unsuccessful.
With the 1973 oil crisis, unemployment and inflation returned to Europe, forcing it to find new markets for investments and raw materials. Thus, the EEC struck deals with Latin American countries that had economic potential, such as Brazil. But the latter underwent a financial crisis after democratization, and future partnerships became uncertain.
When Portugal and Spain entered the economic block, negotiations were reinvigorated. More importantly, the 1992 Maastricht Treaty gave birth to a Framework Cooperation Agreement between the newly created EU and Brazil. Enhanced and expanded in 2007 during the first EU-Brazil summit, it established their strategic partnership.
Subsequent summits defined common objectives in terms not previously explored, such as peace, international security, and actions within the United Nations. Nonetheless, tensions from the Common Agricultural Policy on the European Side and industrial protectionism from Brazilians weakened the partnership.
A hard blow to EU-Brazil relations came in the form of Bolsonaro’s election in 2018. The right-wing populist dismantled projects from previous administrations, such as concern for the environment and the support for multilateral solutions – even threatening to withdraw from the Paris Agreement. These postures led to the cancellation of German and Norwegian financial aid for instance.
Another path for cooperation is the trade deal between the EU and Mercosur, it’s South American counterpart. Negotiations were concluded in June 2020, but many countries have not ratified or had national parliaments vote against it. If accepted, the agreement would create the largest free-trade zone in the world, with Europe providing industrial goods and pharmaceuticals and South America mostly exporting meat, sugar, and other agricultural products.
The main impasse still resides in Brazil and its neighbors being able to offer environmental guarantees. In addition, President Emmanuel Macron has manifested his opposition to the agreement because of the economic asymmetry between the parties, which could damage French agriculture sectors.
A portion of the Brazilian population lost their appreciation for Macron after he mentioned the internationalization of the Amazon rainforest. In Brazil, both the right – connected to the army – and the left advocate for the sovereignty of the territory, including natural resources such as the forest.
The most likely outcome is a gradual acceptance of the agreement as new mechanisms for sustainable development get introduced, such as a quota for greenhouse gas emissions and deforestation monitoring by NGOs.
In short, both the EU and Mercosur have leaders who are influenced by lobbyists and have been dealing with the unwanted consequences of protectionism and liberalism. The management of natural resources within the context of climate change has also become an obstacle to the partnership. Finally, EU is Brazil's second most significant trade partner, and negotiations with Mercosur cannot progress without Brazilian cooperation.