Friday, August 8th 2014 - 07:59 UTC

Brazil insists in trade agreements and closer ties with Pacific Alliance, despite Mercosur

Brazil confirmed that it will try to bring forward to 2016 the free trade agreement with Chile, Peru and Colombia, scheduled for 2019 and underlined the need for Mercosur and the Pacific Alliance to converge as part of the region's productive integration process.

“Brazil's trade strategy targets productive integration with Latin America and multilateral agreements with EU US and China” says minister Borges

 “Brazil's trade strategy targets productive integration with Latin America and multilateral agreements with the European Union, United States and China, the country's main trade partners”, said Mauro Borges, Development, Industry and Foreign Trade minister addressing a trade forum in Rio do Janeiro.

“Brazil can't be an importing country, we need to be vigorously exporters and our trade strategy is to double in a few years our export numbers”, added Borges.

For this purpose the Brazilian commercial policy is based on strengthening relations with South American countries and with those considered the main trading partners such as the EU, US, China and Japan.

To this purpose ”an integral association between Mercosur and the Pacific Alliance (Chile, Peru, Colombia and Mexico) countries is a target and thus “Brazil's proposal to advance to 2016 the opening of a free trade agreement with Colombia, Chile and Peru”.

However it is interesting to point out that the Pacific Alliance also includes Mexico and not a word is mentioned to that respect. In effect Brazil and Mexico, number one and two Latam largest economies are in open competition for leading Latin America, politically and economically, and attracting the most foreign investment.

These last few years the exceptional value of Brazilian commodities and a strong currency turned the country into the leading economy, while Mexico, highly dependent on the US suffered the consequences of the slower growth of the world's number one economy.

But currently the US is rapidly recovering, and so is Mexico with exports to Nafta associates while Brazil is facing several years of poor growth, declining export prices, a less dynamic China and weaker currency. It should not come as a surprise, following the reforms implemented by Mexico that the country could soon become the largest economy in Latin America.

A few weeks ago the Under Secretary for South American affairs in the Brazilian foreign ministry, Antonio Jose Ferreira Simoes advanced the idea of Mercosur closer ties with the Pacific Alliance as official policy.

However he also admitted that in effect closer links and integration depends not only on Brasilia, but also on a consensus from the other members, Argentina, Paraguay, Uruguay and Venezuela, which is not always readily available. And this despite the growing demands from Brazilian manufacturers and farmers.

In effect during the Mercosur summit in Caracas last month Brazil sponsored the initiative of convergence with the Pacific Alliance, but the issue although in the agenda, “was not addressed”.

Brazil in two months time will be holding presidential elections and Dilma Rousseff is bidding for re-election. The weak Brazilian economy performance has become a campaign issue as has been the constraints that the Mercosur consensus clause puts on Brasilia's attempts to reach trade and investment agreements with third parties.

Uruguay and Paraguay with small economies that need to open to the world support the Brazilian position. Argentina, fighting the world, is rather reluctant.

22 comments Feed

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1 Anglotino (#) Aug 08th, 2014 - 08:37 am Report abuse
Brazil is shackled to Argentina and Venezuela with their myopic governments.

Thankfully no one in the Pacific Alliance is so encumbered. If such an agreement is put in place (highly likely), you can bet that it will be extremely beneficial to the Pacific Alliance economies which are based on outward and open policies.

The fact that Ecuador has just signed a trade agreement with the EU and Brazil has been unable to, shows how powerless and restricted Brazil is.
2 Jack Bauer (#) Aug 08th, 2014 - 06:01 pm Report abuse
If Brazil wants to really go ahead economically, it's got to put aside all the political ideology bullshit and start to deal with countries that effectively have something to offer. While Rouseff and the PT put their friendship with Argentina and Venezuela above the national interest, Brazil will go nowhere, except down the drain.
3 ChrisR (#) Aug 08th, 2014 - 07:03 pm Report abuse
Brazil has thrown away the chance to become a first world country by sticking with The Dark Country and showing scant regard for the rule of constitutional law as practiced by Paraguay and other correctly governed countries.

The nonsense with the US over spying and ‘phone tapping showed how shallow Dilma is and how arrogant to think she can operate a system remote from the ‘net but giving her citizens the same opportunities as the www.

What is it with these cretins that ‘rule’ countries in SA? They can’t all have been dropped on their heads at birth, can they?

Given the abuse Dilma has shown Mr. Market they have very little chance of expanding exports for the foreseeable future: that takes money and who in their right mind would invest in them with Dilma and The Liar Mantega ‘in charge’? It’s farcical to even imagine it without wholesale fiscal changes and the reining in of the unions.
4 Tik Tok (#) Aug 08th, 2014 - 09:51 pm Report abuse
It will be another dreary old 4 years if Dilmas lot get back in, and I'd doubt a trade agreement anywhere unless with someone like Turkmenistan.
5 Brasileiro (#) Aug 09th, 2014 - 12:11 am Report abuse
Lula 2018
Lula 2019
6 JoseAngeldeMonterrey (#) Aug 09th, 2014 - 02:39 am Report abuse
Brazil´s the king of commodities, they can´t become a manufacturing export machine because their currency is too overvalued for manufacturers to compete in the world, their protectionism doesn´t help either. But if they are to pursue free-trade agreements with other countries in the region, then surely Brazilian industries will find a way to compete. They just need to open up to the world a little.
7 ilsen (#) Aug 09th, 2014 - 10:00 pm Report abuse
Drop Argentina. Drop Venezuela.
It is the only way forward.
8 Alistair Nigel (EUian) (#) Aug 09th, 2014 - 10:57 pm Report abuse
Sovereign nations, sovereign decisions. If Brazil sees it so, then they should go ahead with other trade agreements.

I am smart enough to know the world is not a one-size fits all. Whats good for Brazil may not be good for Argentina and viceversa.
9 Jack Bauer (#) Aug 09th, 2014 - 11:04 pm Report abuse
Lula : b. 27/10/45
Lula : d. 26/10/14
10 Alistair Nigel (EUian) (#) Aug 11th, 2014 - 08:04 pm Report abuse
A free trade treaty with the EU is about as useful for Argentina as an extra pair of eyes at the bottom of one's feet.
11 ilsen (#) Aug 11th, 2014 - 09:58 pm Report abuse
Of course, being Chinese,and only recently learnt English, you presume to be an expert?
Bhaaahahaha!
Tobi you are hilarious!
The article is about Brazil you twat.
12 Alistair Nigel (EUian) (#) Aug 11th, 2014 - 10:38 pm Report abuse
What are you talking about?

I was diagnosed with a case of Dissociative Fugue. I'm Argentine.
13 ilsen (#) Aug 12th, 2014 - 09:50 pm Report abuse
Omg!
You get more crazy every day!
Bwahahahahahah! !!!
14 Hepatia (#) Aug 13th, 2014 - 05:01 am Report abuse
Closer ties with the PA is a good thing. But lets be realistic. The Chilean economy is about the same size as that of one Brazilian state. Like wise with countries such as Peru and Ecuador. So, to the extent that closer relations are about anything at all, they are about Mexico. But, of course, Mexico is not a large enough country to be a key to Brazil's future.

Brazil's future can only be found in Africa.
15 Jack Bauer (#) Aug 13th, 2014 - 01:36 pm Report abuse
@14 Hippy... what the hell does Brazil expect to trade with Africa ?? Just for your information, our ex-Idiot...erhhh, ex-President Lula, when he came to power 12 years ago, decided to turn his back on the USA and Europe, because, in his “'brilliant”' mind, Africa was the future. He adopted this posture for several reasons, none of which would benefit Brazil, but that is not relevant now....the fact is that trade between Brazil and Africa is not going to be the solution for Brazil's future.
16 Tik Tok (#) Aug 13th, 2014 - 04:15 pm Report abuse
Brazil has dug themselves into a hole because of their agricultural strength, very doubtful if decent blocks like the EU or North America will actually want to do a deal because their constituents will push back. Brazil has no choice and must do deals with the Pacific Alliance and develop supply chains working with other countries, that means they must go it alone, and must conform to the rules. Not an easy route with the populist idiots in power.
17 ChrisR (#) Aug 13th, 2014 - 06:27 pm Report abuse
“Brazil's future can only be found in Africa.”

YES, down at the level of Zimbabwe.
18 Hepatia (#) Aug 14th, 2014 - 03:03 am Report abuse
en.mercopress.com/2014/08/08/brazil-insists-in-trade-agreements-and-closer-ties-with-pacific-alliance-despite-mercosur#comment344650: No doubt your observation regarding “supply chains” is correct. But that only addresses the industrial infrastructure. Where is the large and growing markets? Certainly not in the PA for the reasons I have already given.

As a set, the countries on the continent of Africa have the world's largest growth rates. The fact is that if Brazil wants to grow then it cannot ignore this. It also helps that Brazil is the closest large country to Africa.
19 Jack Bauer (#) Aug 14th, 2014 - 07:11 pm Report abuse
@18
The fact tat Africa, according to you, “has the world's largest growth rates”, in what way is that growth, which can presumably be translated into riches, well-being, i.e., quality of life, filtering down to the general population ?? it is notorious that most African populations live in abject poverty, surrounded by disease and corrupt governments....how does that, in your mind, mean growth ?
If Brazil wants to establish trading partners, it must look into the future to see whether the partners offer reciprocity , if they are reliable, good payers, able to sustain a productive swap. Other than oil in a few West African countries, Africa has little to offer Brazil ; An exception maybe South Africa, more industrialized, provided Jacob Zuma doesn't take it down the same path Rhodesia went. I lived in West Africa for the better part of 5 years, and believe me, it doesn't have what it takes.
20 Chicureo (#) Aug 15th, 2014 - 05:19 am Report abuse
I wonder if there is a link with the abrupt UNASUR meeting cancellation...
21 Hepatia (#) Aug 16th, 2014 - 04:14 pm Report abuse
en.mercopress.com/2014/08/08/brazil-insists-in-trade-agreements-and-closer-ties-with-pacific-alliance-despite-mercosur#comment344899: In 1940 Asia was a basket case. It was either ruled by foreign occupiers, fascists or no coherent government at all. These governments where oppressive, corrupt and illegitimate. The people of Asia were living in abject poverty. Their economies were primitive. From the point of view of 1940 very few people were predicting that by 1980 the consensus would be that the future was to be found in Asia. And so the future has arrived.

Economic growth in Africa is an objective fact. And it is sustained. This has real consequences for Africa and its political and social structure.

The future is the space in which we all live. It is not possible for anybody to live successfully in the past. And so it is for countries.
22 Jack Bauer (#) Aug 17th, 2014 - 08:33 pm Report abuse
@21....trying to compare Africa to Asia is like comparing you to someone with a brain. If you built a wall around Africa and tore it down in 100 years , it wouldn't have gone ahead one iota...Real progress takes a lot more than just some wishful thinking....

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