Brazil’s president Luiz Inácio Lula da Silva has ruled out signing a trade deal with the EU unless Brussels eases requirements for Brasília to open up its manufacturing industry to foreign competition.

Lula, who is in Brussels to try to speed up progress on a trade deal between Brussels and the Mercosur bloc of four South American countries, said he wanted to change rules that would prevent signatories handing government contracts to domestic companies without a competitive process that would be open to foreign firms.

A proposal circulated between the Brazilian, Argentine, Uruguayan and Paraguayan officials that are working on the deal would, Lula said, allow governments to continue to award contracts to smaller domestic firms, as “every country in the world” does, and support a “sovereign industrial policy”.

It would be presented in Brussels “within two to three weeks”, Lula said at a press conference, saying he believed the EU officials would bend to the Latin American countries’ demands.