Brazil's Lula: Mercosur trade pact still needs adjustments

<html xmlns=""><head><title>UPDATE 1-Brazil's Lula: EU-Mercosur trade pact still needs adjustments</title></head><body>

Adds Lula comment on paragraph 3, context on paragraphs 4-5

BRASILIA, June 2 (Reuters) -Brazil will not sign a long-overdue trade pact between the European Union and the South American bloc known asMercosur without adjustments, President Luiz Inacio Lula da Silva told reporters on Friday.

Lula specifically pointed to his government's opposition to allowing European companies to sell goods and services to Brazil's public sector, as Europe's trade negotiators have sought.

"If they don't accept Brazil's position, there is no agreement," he said at an event to inaugurate an electric bus production assembly line in Sao Bernardo do Campo, just outside Sao Paulo.

The leftist leader in the first year of his third term as president stressed that his government will "value the Brazilian product, which generates jobs, generates income and improve people's quality of life."

Negotiations over the trade agreement between the EU and the Mercosur bloc of Argentina, Brazil, Paraguay and Uruguay ended in 2019 with a draft deal after years of talks. But final approval of the accord has been on hold due to concerns, particularly in France, about Amazon deforestation and Brazil's commitment to climate change action.

On Thursday, Lula told Finnish President Sauli Niinisto that his government hopes for a " balanced " agreement that could support Brazil's push for re-industrialization and sustainable development.

Reporting by Maria Carolina Marcello; Writing by Peter Frontini; Editing by Anthony Esposito and David Alire Garcia


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