Guedes: Brazil to leave Mercosur if Argentina curbs bloc opening

Brazilian Economy Minister Paulo Guedes said Thursday (Aug 15) that, should the opposition win the presidential elections in Argentina and show resistance to the economic opening of Mercosur, Brazil will leave the bloc.

The primaries in the neighboring country, held last weekend, which serve as a countrywide survey, indicated the ticket headed by peronist Alberto Fernández—with former President Cristina Kirchner as running mate—as most likely to win. They received 47 percent of the vote. Current President Mauricio Macri, got 32 percent.

The first round is slated for October 27. Should any candidate have more than 45 percent of the vote, there is no need for a second round.

“If Macri wins, Bolsonaro is in good terms with him, and both are in good terms with Trump. So everything will happen at high speed. What if it goes wrong? What if the other side takes it? The question is simple. We’ll continue to open. Will you? If not, then bye! We leave Mercosur and go away. We’ll be very pragmatic. And we don’t feat its effects. Brazil must resume its growth dynamics,” Guedes said at the closing ceremony of a seminar on natural gas, organized by the Brazilian Institute for Oil, Gas, and Biofuels (IBP).

No crisis

In June, Mercosur stroke a free-trade deal with the European Union. The US, the minister reported, also showed interest in a commercial deal with the bloc. He also said Brazil’s willingness to open its market makes the country competitive. “Everyone’s closed for inventory, so to speak, and we’re the only girl available at the party to dance. So everyone wants to dance with us.”

At the end of the event, Guedes talked with journalists and argued that Brazil does not have to be concerned about foreign crisis if its homework is done, as the country has its own growth dynamics. There were moments when the world was on a speedy rise and the country was no better for it, he pointed out.

“If there’s a favorable moment overseas, exchange appreciates, but on the other hand you sell less furniture and fewer textiles. Brazil actually faced quicker de-industrialization while the exchange rate was high. It could be the other way around now. The world may slow down as we pick up pace. Maybe, with cheap energy and a slightly higher exchange, you can re-industrialize auto parts, furniture, shoes, the textile industry. We shouldn’t fear the effects of contagion. Brazil has its own dynamics, as is also the case in the US, China, and India,” Guedes said. “If the dollar wants to reach R$4, or above, because of the election in Argentina or because of the wind overseas, so be it. We’re ready,” he added.