Brazil hopes to make progress with EU-Mercosur trade deal

Brazilian President Luiz Inácio Lula da Silva is counting on progress in negotiations on the free trade agreement between the European Union and the South American trade bloc Mercosur.

"Brazil and the Mercosur members are in dialogue to conclude the negotiations with the European Union and we hope to receive good news this year," he wrote on Twitter after a meeting with business partners in Madrid on Tuesday.

"We want it to be balanced and contribute to Brazil's reindustrialization," he wrote saying the agreement is important for all parties involved.

The EU has been negotiating with Mercosur - which includes Brazil, Argentina, Paraguay and Uruguay - since 1999 on the agreement, which would create one of the largest free trade areas in the world with more than 700 million people.

The agreement had also been put on hold in light of the refusal of Brazil's previous far-right president, Jair Bolsonaro, to address climate change.

The EU expects a change in atmosphere with the new government in Brasilia, while Brazil will take over the Mercosur presidency in the second half of the year, and Spain the EU presidency.

Lula is on his first trip to Europe since taking office as president last October. After Portugal, Spain was his second stop during his visit.