foz do Iguaçu, Brazil, December 20, 2025 – South American nations are doubling down on regional integration, with Brazil’s President luiz Inácio Lula da Silva framing it as crucial for sovereignty and economic stability. The push comes amid growing geopolitical risks and a stalled trade deal with the European Union, prompting a search for new partnerships.
A United front in a Fragmenting World
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Lula emphasized the importance of South American unity during the 67th Mercosur Summit.
- President Lula defended regional integration as a bulwark against external pressures and internal threats.
- He criticized the EU’s prolonged delay in ratifying a trade agreement with Mercosur.
- Lula announced plans to expand cooperation on combating organized crime and violence against women.
- The president highlighted South America’s potential to lead the global energy transition.
“In a world where building walls seems easier than building bridges, this example deserves to be remembered,” Lula stated, referencing the 40th anniversary of the Declaration of Iguaçu, which laid the foundations for Mercosur. He also noted the recent inauguration of an Integration Bridge connecting Brazil and Paraguay.
Sovereignty and Security Concerns
Lula firmly rejected the notion that regional integration compromises national sovereignty, arguing that true threats stem from “war, anti-democratic forces and organized crime.” He issued a strong warning against external military intervention in Venezuela, calling it a potential “humanitarian catastrophe” and a dangerous precedent. He also pointed to the resilience of Brazilian democracy following the January 8, 2023 coup attempt, stating, “The culprits were investigated, tried and convicted according to due legal process. For the sake of democracy, we must not allow impunity.”
EU Deal on the Horizon, but Alternatives Pursued
Despite the frustrations with the EU, Lula expressed cautious optimism about the potential for a deal. “It is indeed incomprehensible that after 26 years, it may not be possible to conclude a negotiation that has been going on for 26 years,” he said.
He revealed receiving a letter from the presidents of the European Commission and the European Council anticipating approval in January and confirmed direct talks with European leaders, including Italian Prime Minister Giorgia Meloni, who he stated “will be ready to sign” at the beginning of January.
Expanding horizons and Regional Infrastructure
While awaiting the EU’s decision, Mercosur is actively pursuing agreements with other partners, including the European Free Trade Association (EFTA), and negotiations with India, Canada, the United Arab Emirates, Japan, and Vietnam. Regional talks are also underway with Panama, Colombia, and Ecuador.Lula highlighted the need to increase intra-regional trade, currently at only 15% of the total, advocating for the integration of the sugar/alcohol and automotive sectors.
South America, Lula asserted, has the potential to lead the global energy transition, leveraging its abundant critical minerals, biofuels, and renewable energy sources. He proposed a Common Mercosur Nomenclature for Lasting Aviation Fuel (SAF) and the reactivation of the Working Group on Mining and Geology. He also underscored the importance of integrating gas and electricity networks and advancing the South American Integration Routes programme to double intra-regional trade.
Addressing Inequality and Strengthening Institutions
To reduce disparities among member countries, Lula called for the renewal of the Mercosur Structural Convergence fund (FOCEM II) and increased Brazilian contributions, particularly following Bolivia’s recent entry into the bloc. He also proposed the creation of a South American guarantee Fund, capitalized at US$500 million, to provide credit for small businesses, with a focus on women entrepreneurs. The resumption of the Mercosur Social Summit was also celebrated.
Concluding his speech, Lula commemorated the 50th anniversary of Operation Condor, emphasizing the duty of democratic governments to uphold human rights. “Even though some may be nostalgic for former dictators, we must insist on moving forward, never backwards,” he declared.He expressed optimism that the EU agreement would be finalized during Paraguay’s presidency of Mercosur.
