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Forget Mercosur, sign trade accord with EU says Brazil industry

Wednesday, December 24th 2008 - 20:00 UTC
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A leading number of Brazilian businessmen belonging to the country's powerful National Confederation of Industry, CNI, said it was time to sign a bilateral agreement with the European Union, --which would leave out Mercosur--, according to press reports in O Estado de Sao Paulo.

CNI president Armando Montero Neto said Brazil must adopt a more "ambitious" position regarding trade agreements with the European Union. This week Rio do Janeiro hosted the two day EU/Brazil summit where it was agreed that both parties must speak "with one voice" in the coming Group of 20 major economies meeting on April in London. "Mercosur has become partly paralyzed and the feeling is that Brazil is shackled with limited movements; Brazil must reach bilateral agreements, Mercosur's time is up, long overdue", said Luiz Furlan president of the Sao Paulo based food group Sadia in an interview with O Estado de Sao Paulo. In 2007 when Brazil and EU signed an association agreement which opened the way for the summits, Uruguayan officials publicly expressed concern fearing Brazil could end up signing a free trade agreement with the EU, "without the participation of the rest of Mercosur member countries". Brazilian diplomats at the time discarded such a possibility insisting that the Lula da Silva administration would not violate the block's regulations, which impede any Mercosur member to unilaterally sign such agreements with third countries. EU ambassador in Brazil Joao Pacheco said then that the EU was not after a unilateral agreement with Brazil but admitted that Argentina, the second most important Mercosur member country had demands in the manufacturing sector that could become obstacles for the agreement with Mercosur. Ambassador Pacheco also pointed out that the incorporation of Venezuela to the South American trade block, which so far has not happened, (blocked in the Brazilian and Paraguayan legislatives) could interfere with a possible consensus between the EU and Mercosur. These negotiations dating back to the nineties have remained stalled since the end of 1994. At the recent Brazil-EU summit president Lula da Silva and Nicholas Sarkozy from France that holds the EU rotating chair said that Europe and Brazil have a common vision on how to address "not only of the financial crisis, but also of the need to bring the Doha round of world trade talks to a successful conclusion, of the need for alternative energy sources, of the need to halt climate change and of the need to reform global financial institutions". This was followed by a bilateral Brazil-France strategic alliance agreement singed by both presidents which includes 8 billion US dollars in military cooperation plus understandings in several other areas. CNI and Fiesp, Sao Paulo Industrial Federation are Brazil's two main manufacturers organizations with strong influence in government and policy making.

Categories: Economy, Mercosur.

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