Brazil hopes the Mercosur trade deal with the European Union (EU) will be concluded this year, a government official said on Sunday, ending years of delay and opening the way to increased trade between the two regions.

The EU and the Mercosur bloc of Argentina, Brazil, Paraguay and Uruguay completed negotiations in 2019 but the deal has been on hold due to concerns, particularly in France, about Amazon deforestation and Brazil’s commitment to climate change action.

Brazil’s President Luiz Inacio Lula da Silva has promised to overhaul his country’s climate policy.

While Germany has pushed for a swift conclusion, France has said it is waiting to see progress in Brazil.

Speaking in Lisbon, Marcio Elias Rosa, a top secretary at Brazil’s development and industry ministry, said negotiations with the EU were ongoing and countries were discussing the “socio-environmental requirements” imposed by the bloc.

“The signs are very positive,” Elias Rosa said. “Details are missing but I believe we will close the deal and the agreement will be good.”

Elias Rosa said all Mercosur nations were working with the same purpose of concluding the deal but they needed to agree on some of the requirements.

“Brazil already complies with the socio-environmental requirements related to labour legislation,” Elias Rosa said. “It is necessary others also agree but we are very close to that.

“I would say we will close (the deal) this year.”

Portugal, as well as neighbouring Spain, which will assume the presidency of the EU Council during the second half of 2023, are “important allies” in discussions with the bloc, Elias Rosa said.

Together with other government officials, Elias Rosa is in Portugal as part of a five-day visit by Lula, his first to Europe since being elected president.