Macron opposes Mercosur trade, saying Brazil ‘lied’ on climate

Outraged over the Amazon fires, Emmanuel Macron branded Brazil’s president a liar and threatened to block the European Union’s trade deal with the Mercosur countries as he prepares to whip the Group of Seven leaders into climate action.

The French president’s office said that it has become clear that Jair Bolsonaro wasn’t serious about his commitments on tackling climate change when he spoke to world leaders at the Group of 20 summit in Osaka earlier this year.

“The president can only conclude that President Bolsonaro lied to him in Osaka,” at the G-20, the statement said. “Under these conditions, France is opposed to the Mercosur deal.”

A day before he’s due to welcome G-7 leaders to Biarritz, Macron said he would make the burning of the Amazon jungle a priority at the summit. That provoked an angry response from Bolsonaro, who accused him of acting like a colonialist.

“The news is really worrisome, but we need to lower the temperature, there are fires in Brazil every year,” Brazilian Agriculture Minister Tereza Cristina Dias told reporters in Brasilia. “There were fires in Portugal, in Siberia, there were fires all over the world and Brazil wasn’t questioning them.”

The way that an environmental dispute escalated so quickly into a new front in the global trade tensions shows the growing importance of climate as a fundamental plank of geopolitics. Even before Macron’s announcement, Ireland said it could not vote for the Mercosur agreement and Finland wants the EU to consider a ban on Brazilian beef.

The EU has sought to leverage the size of its market to pressure trading partners into doing more to reduce emissions and is also concerned that its companies will be undercut by rivals operating in places with looser restrictions.

But the configuration of the G-7 right now will make it difficult for Macron to make a lot headway beyond some token words. Donald Trump famously ripped up last year’s communique and does not want to be cornered. The U.K.’s Boris Johnson is eager to tighten his bond with the U.S. president and at odds with European allies over Brexit. Italy is mired in a messy political crisis at home and has no prime minister. Japan is unlikely to stick its neck out – it is more concerned about the potential fallout from the U.S. trade war with China.

The EU wrapped up 20 years of negotiations to seal an accord with South America’s leading customs union just weeks ago, in what was then seen as a major retort to Trump’s attacks on the global system of free trade. The deal could affect almost 90 billion euros ($100 billion) of goods and Brazil expects to see its economy increased by about $90 billion over the next 15 years.

Officials on both sides are still fine-tuning the agreement and it still needs to be approved by EU governments before it can enter into force. A Brazilian official, with direct knowledge of the government’s position, said that the EU-Mercosur deal is not ready to be signed yet, and that while the deal could be rejected or put to one side, it could not be changed. MDT/Bloomberg