EXCLUSIVE-Paraguay’s president-elect says EU-Mercosur talks must be halted By Reuters

2023-08-08 16:50:55

© Reuters. President-elect of Paraguay, Santiago Peña 07/28/2023 REUTERS/Adriano Machado

By Daniela Desantis

ASUNCION (Reuters) – Paraguayan President-elect Santiago Peña said in an exclusive interview with Reuters that talks on a trade deal between the European Union and Mercosur must be stopped, and that he doubts that the European bloc has a “genuine interest” in making progress. .

Peña, who takes office next week, also said the EU’s environmental demands in the discussions were “unacceptable” and would harm economic development in the country, which is a major exporter of oil.

The comments, Peña’s strongest on the talks since his election victory in April, underscore rising tensions as the two blocs seek to finalize the deal, long delayed due to doubts over Brazil’s environmental commitments under the former government. -President Jair Bolsonaro.

In South America are the main exporters of soy, and in the world. Countries on the continent have increasingly opposed the EU’s environmental demands, saying they represent European protectionism and would harm local production.

“This approach by the EU is simply unacceptable,” Peña, 44, who represents the conservative Colorado Party, said during a rare interview at his home in Asuncion.

“What the European Union has to do is clarify whether or not it wants to go ahead with a free trade agreement. Today I question whether they have a genuine interest.”

Mercosur officials are working on a counterproposal before meeting with EU negotiators. There are some hopes of reaching an agreement later this year.

“From our point of view, the negotiations must be closed and the decision simply made: do we want this to happen or do we not want this to happen?” Peña added.

The president-elect also said that he does not plan to create new taxes on the agricultural sector, the economic engine of the world’s third largest exporter of soybeans. He said that some taxes on international trade could even be eliminated to increase competitiveness.

“Paraguay needs to consolidate the model it has today of low taxes to attract investment and generate jobs,” he said. “Probably in the future with a more formalized economy… we could think about some adjustments to some rates.”