MercoPress. South Atlantic News Agency

Brazil's Economy Minister favors one-on-one deals despite Mercosur's current ban

Mercosur is becoming a “tool of ideology,” said Guedes

Brazil's Economy Minister Paulo Guedes Monday said Mercosur would “modernize” and anyone against that was free to leave the bloc.

The Presidents of Uruguay and Argentina have already clashed over this issue in a Mercosur Virtual Summit. Since then, they seem to have patched things up but Uruguay nevertheless went on its own to seek a trade arrangement with China which s now being negotiated.

By “modernizing” Guedes meant a possible reduction in external tariffs as well as allowing member states to broker one on one deals with other countries or blocs, which current Mercosur regulations explicitly forbid.

These to aspects of a “modernized” Mercosur and endorsed by Uruguay and Brazil, Paraguay is partially in favour of them and Argentina bluntly opposes them.

In the case of the maximum tariff on Mercosur imports, which is currently 35%, although on average 12% is applied, Brazil intends that its ceiling be cut down to 10%.

On the other hand, the Argentine government would prefer a more cautious approach involving moderate and selective reductions, because these are required to allow domestic production to remain competitive against imports.

Despite Argentina's position, “our position is to move forward,” Guedes stressed in a virtual meeting with a group of businessmen, during which he addressed the bloc's current situation.

“We are not going to leave Mercosur, but neither are we going to accept Mercosur as a tool of ideology,” said Guedes, a member of President Jair Bolsonaro's administration, which regards Argentine President Alberto Fernández as a “socialist”.