MercoPress. South Atlantic News Agency

Brazil admits EU/Mercosur deal stalled because of European concerns about agriculture

“They are reluctant to open their markets for our agriculture, and we also have our own concerns about jeopardizing our industry”, said ambassador Mesquita

Brazil's agricultural competitiveness is a concern to countries and trade blocks negotiating agreements with Brazil, according to ambassador Paulo Estivallet de Mesquita, head of the Economics Department of the country's Ministry of Foreign Relations (MRE).

 “This is also the atmosphere surrounding a trade agreement that Brazil and Mercosur are negotiating with the European Union” said Mesquita addressing the National Conference on Foreign Trade (Enaex), which was organized by the Brazilian Foreign Trade Association (AEB) in Rio de Janeiro.

“This is one of the big questions as to whether this agreement will actually work out at all. Every time we are working on similar agreements they, our prospective partners, have concerns about our agriculture.”

On the other hand, Brazil and other Mercosur countries hesitate about opening their economies for manufactured goods from abroad.

“They are reluctant to open their markets for our agriculture, and we also have our own concerns about jeopardizing our industry. We shouldn't subject it to such sudden competition. This is the main drawback to reaching an agreement” admitted the Brazilian official.

However that does not mean that an EU deal is unfeasible.

“Of course if we manage to close the deal, we'll face quite a challenge because as a strong partner, the EU is a big competitor for our industry.” But this will also pave the way for Brazil and Mercosur to seek further agreements with other partners.

Mesquita also pointed out that negotiations with major partners face other barriers, one of which is fiscal. “The fact that our rates are high relative to other countries may pose a challenge to some businesses when they do set their feet here.”

The Brazilian official also recalled that Mercosur decisions are on consensus, this means all members must agree if an agreement is to be reached with a third country or block. However even if Brazil attempts a separate negotiation with a third party it will face the same challenges.

“Even if we negotiate without Mercosur, the same issues remain - concerns surrounding agriculture and our own concerns for our industry.”

And if Brazil closes a trade agreement with a partner that accounts for 25% or 30% of our foreign trade as is the case with the EU, “it will make sense” to pursue similar agreements with all other partners, including China and the US”.