President Dilma Rousseff and representatives from the European Union confirmed yesterday that a free trade deal between Mercosur and the EU is close to completion. The negotiations have been the main issue at a Brazil-EU summit held in Brussels, at which both business leaders and senior politicians are present.

The feeling is that the agreement is likely to be sealed following another meeting between the EU and South American representatives on March 21, with both parties willing to make concessions in order to speed up the process. For Dilma, the chance of a deal being signed is “real and concrete”. Negotiations on the agreement have taken fourteen years.

“I believe that we are, for the first time, close to achieving our goal. For Brazil’s part, we are keen to make this happen, as are the other member countries of Mercosur,” she said, alongside the President of the European Commission, José Manuel Barroso, and the President of the European Council, Herman Van Rompuy.

Progress on negotiations should have occurred towards the end of last year, but stalled on account of Argentina’s economic problems, as well as further hindrances created by the Europeans. Yesterday, however, Dilma said that she does not think the Argentine government will constitute any problem.

Officially, Dilma did not have the authority to speak on behalf of Mercosur in Brussels. However, the Brazilian business leaders present at the summit urged her to discuss the deal, and the Europeans also view the issue as a priority. Barroso echoed Dilma’s optimistic tone. “Today we reiterate our commitment to the conclusion of this fair, ambitious deal,” he said.

Dilma also used the summit to criticise recent actions taken by the EU at the World Trade Organization against the Brazilian policy of incentives to local industry. She said she was “surprised” and “puzzled” by the fact that the EU had raised doubts regarding the policy of incentives for the Free Economic Zone of Manaus and the program Inovar-Auto, of the automobile industry.

“We were puzzled by the dispute regarding programs which are essential to the sustainable development of the Brazilian economy, though we know it was simply a preliminary consultation,” she said. She affirmed, nevertheless, that the disagreement will not have any effect on the EU-Mercosur negotiations.

Barroso also tried to play down any tension, suggesting that the EU wants merely to understand mechanisms used by the Brazilian government. “The EU has nothing against the Free Economic Zone, we are not opposed to it, and we understand it very well,” he said.

Translated by TOM GATEHOUSE