Brazilian Expert: Mercosur Making Unprofitable Concessions for Agreement with EU

Brazil’s President Jair Bolsonaro made his first official visit to Argentina late last week. After meeting with President Mauricio Macri, Bolsonaro said that there were not enough “small details” to conclude the EU-Mercosur trade agreement.

“There is a lack of small details, it's important for both countries. There is a lack of a solution to the issue with wines, dairy products, and some other things. [Minister of Economy] Paulo Guedes is already in the game and we will solve this issue in the coming weeks”, said Bolsonaro while talking to reporters.

Earlier, Paulo Guedes himself stated that an agreement between the EU and Mercosur may be completed soon. According to the minister, the conclusion may occur in 3-4 weeks.

Leonardo Trevisan, a professor at the School of Advertising and Marketing of São Paulo, a specialist in international relations, in an interview commenting on the president’s statement, expressed surprise and concern about such a quick resolution of the issue.

“What we are seeing here is the level of vulnerability of the Brazilian position. For years the Europeans have put forward demands that have never been accepted by Latin American countries, Mercosur and, especially, by Brazil. And just within a few weeks, these requirements were accepted, and, most seriously, these requirements affect articles that have been very sensitive so far”, the professor said.

READ MORE: EU Farming Chief Blasts Mercosur for Faltering Latin American Trade Talks

According to Trevisan, Mercosur makes more concessions than the EU in order to achieve an agreement.

“A good deal is one that is good for both parties. When excessive concessions are made by only one side, this maxim that a good deal is good for both sides is a bit weak”, the professor noted.

The expert also fears that perhaps the hasty push for an agreement is connected with the fact that the treaty may help European enterprises that are suffering from the trade war between Beijing and Washington.

This is because Brazil abandoned the so-called rule of determining the country of origin, where 60% of the components of any product must be produced in Brazil.

“What is changing in these agreements is that the EU began to send favourable signals because Brazil now accepts 60% or more of foreign products”, the expert said.

“Europe, and we must understand this, has broad agreements, including with China. Thus, the iron that we buy, 60% components of which comes from Europe is ‘Made In Europe’, in fact, not ‘Made in Europe’, but is Made in China and in various other places. In practice, this will give the absurd competitiveness of European goods to the detriment of the national industry”, Trevisan explained.

Therefore, he continued, such haste to conclude this agreement could harm Brazil.

“The rush to conclude an agreement between Mercosur and the EU could be a by-product of the agreement between China and the United States. In this case, we lose and lose fairly enough”, the expert summarised.

READ MORE: Trade Deal Between Mercosur, EU Will Not Be Signed at G20 Summit — Minister

It should be recalled that the EU and Mercosur have been negotiating an agreement on free trade for 20 years. The Brazilian government expects this to happen in the next six months.

The views expressed in this article are those of the speaker and do not necessarily reflect those of Sputnik.