Mercosur is not a priority, and Argentina is not a priority for the new government of Brazil, the priority is to trade with all the world. The strong statement came from Paulo Guedes, signaled as the next Finance minister of president elect Jair Bolsonaro's cabinet and a crucial player in that team since the newly elected leader has admitted a limited knowledge of economics.
In his first meeting with the media Guedes, a graduate from Chicago University and a successful private banker and funds manager, said that the immediate tasks were fiscal measures to balance the budget, opening the Brazilian economy and a massive privatization of state owned companies, which will begin the first day of 2019 when Bolsonaro takes office.
In this scenario Mercosur is not a priority, nor is Argentina, but Brazil will not break any commercial relation and insisted that Mercosur, the block made up of Argentina, Brazil, Paraguay and Uruguay had become a cognitive prison impeding its members to unilaterally be involved in trade agreements with third countries or blocks.
Our immediate task is to cut to zero the fiscal deficit, which currently stands at over US$ 40billion, some eight points of GDP. Likewise the pensions' reform which the current government of president Temer was unsuccessful in having approved despite the fact Congress was highly discredited because of the Petrobras and Odebrecth corruption scandals. A systematic bribing of company officials and lawmakers to obtain the state managed oil company and public works contracts. Almost half of the current congress members have been in some way involved in these schemes, according to police investigations.
The other item to combat excessive spending is to privatize state-run companies, reforming the bureaucracy, cutting taxes and creating ten million new jobs, explained Guedes. Brazil currently has a 12% unemployment rate inherited from the previous administration of Dilma Rousseff and several years of recession and very slow growth recovery.
More specifically on Mercosur Guedes said it was a highly restrictive block, which had fallen prisoner of ideological alliances, which meant trading only with those members that had a similar political view. Why should I only trade with Argentina, Uruguay, Paraguay and Venezuela? No I'm going to trade with the whole world.