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Brazil again pushes for loosening of Mercosur trade deal rules

Buenos Aires Times | 27 February 2021

Brazil again pushes for loosening of Mercosur trade deal rules

Brazil wants to alter the rules of the Mercosur trade bloc to make it more flexible, so that each country can independently negotiate trade agreements with other nations.

"Our goal is for Mercosur to be an efficient negotiating bloc.” Brazil’s Foreign Minister Ernesto Araújo told the AFP news agency in an interview on Thursday.

“If that is possible through Mercosur as a bloc, fine. If in some cases it is better to work individually ... we need to find those flexibilities," he added.

"Mercosur has to be open to the world, and allow or [at least] not prevent an opening of Brazil to the world. This is vital for our competitiveness," said the minister.

The comments once again pull back the curtain on tensions within the Latin American trading bloc. Brazil, Paraguay and Uruguay are all in favour of liberalising existing rules that block members from negotiating individual trade deals without the approval of all partners. Argentina, however, under Peronist leader Alberto Fernández, is less keen.

The push to relax the rule has not been helped by tensions between Fernández and his outspoken Brazilian counterpart, Jair Bolsonaro, who do not see eye-to-eye, on practically anything. The two leaders, despite being key trade partners with one another, barely have a relationship.

Nevertheless, Brasilia confirmed this week that Bolsonaro would make his first trip to Argentina since Fernández’s inauguration for the next Mercosur summit, pencilled in for March 26 – a date that marks the anniversary of the bloc’s founding in Foz de Iguazu, 30 years ago.

Brazil, Paraguay and Uruguay are expected to restart debate on the issue at that meeting, as well as pushing for a reduction in Mercosur’s tariffs.

In his interview with AFP, Araújo called for a "gradual reduction" of the bloc’s Common External Tariff (AEC), another issue that has been debated in the bloc for years.

"We have the idea of ​​reducing the AEC to improve competitiveness, but gradually, which also takes into account our reality, our productive sectors," he declared.

‘Interest groups’

Several "interest groups" are pressuring the European Union to use the environment as a "pretext" to delay ratification of the sweeping free-trade agreement with the Mercosur bloc, Brazilian Foreign Minister Ernesto Araújo said Thursday.

Speaking to the AFP news agency, the Brazilian officials accused interest groups of “taking up the issue of the environment to delay that agreement," though he insisted that he wasn’t saying that “concern for the environment is not legitimate.”

The historic trade deal, agreed after more than 20 years of negotiations has failed to progress since its initial approval in 2018. Ratification has stalled among the EU’s 27 member states, especially in France and Germany, over concerns about the deforestation of the Amazon rainforest.

"Brazil, as well as large producers such as Argentina and Uruguay, made sacrifices to accommodate this sector, of enormous interest in France and other European countries," said Araújo, speaking from Brasilia.

"It is very important to demystify that the Mercosur-EU agreement would contribute to the destruction of the Amazon. In no way, and we are ready to show that this is not the case," he added.

To unblock the path to ratification, the EU last month proposed that the parties involved issue a joint declaration committing to environmental sustainability, including a reduction in deforestation.

"We agree, in principle, that there is some type of additional commitment, because we do not want to reopen what is already closed in the agreement,” said the Brazilian minister. “It is important that it be something of a reciprocal nature, because it is not only Brazil that has to make environmental commitments."

A 2020 report issued by the government in Paris estimated that the EU-Mercosur agreement could increase deforestation in Brazil by up to 25 percent.

French farmers – Europe’s main beef producers – have also criticised the deal, branding it a “disaster.” They say the deal, which authorises the importing of 99,000 tons of beef from Mercosur nations with a tariff of 7.5 percent, will damage their industry.

According to a report in Perfil, Uruguay’s Foreign Minister Francisco Bustillo suggested while giving testimony to a committee of lawmakers in Montevideo this week that the closing of the historic agreement was rushed at the behest of Argentina’s former president Mauricio Macri, who wanted to announce the deal before his bid for re-election.

Bustillo, who the newspaper said had a good relationship with President Fernández, said that the deal was “not closed,” with “four or five very important issues" on the table that prevent ratification.

 source: Buenos Aires Times