Brazil chancellor: Positive impact of EU deal already visible

Brazilian Foreign Minister Ernesto Araújo said the commercial agreement between Mercosur and the European Union (EU), unveiled last week, has already made a visible impact, despite awaiting ratification by Parliaments in each of the 32 countries involved.

“Even before the accord is brought into effect, which must take a while, we can already see a very positive impact in terms of investment attraction. Investors already see Brazil in a completely different way and they will already start positioning themselves taking into account this preferential access we have gained to the European market,” the chancellor said yesterday (Jul 4) during a live broadcast with President Jair Bolsonaro on Facebook.

The minister also said he plans to speed up the validation process on the Brazilian side, as soon as it is passed by Congress.

“We will try to have an arrangement within Mercosur so that it can be brought into force as soon as it is approved by each Parliament in the bloc. On the European Union’s side, this individual entry is not possible, but on our side it is, so we’ll work to have it done this way, so that these advantages may lead to results as quickly as possible,” he added.

Tariffs and services

Under the terms announced, agricultural goods of major interest for Brazil will have their tariffs eliminated, like orange juice, fruits, and soluble coffee. Brazilian exports will have greater access to meats, sugar, and ethanol, among others, through quotas. The agreement also acknowledges distinctive Brazilian products, like different types of cachaça, cheese, wine, and coffee.

The companies in the country will be benefited by the elimination of tariffs in exports of all manufactured goods. The European industry will also have tariffs abolished for sales to Mercosur, but in a piecemeal fashion. The pact will ensure effective access to a number of services in a number of segments, like communication, construction, distribution, tourism, transport, and professional as well as financial services.

The deal also covers regulation-related topics, like services, government purchased, facilitated commerce, technical barriers, sanitary and phytosanitary measures, and intellectual property. In public purchases, for instance, Brazilian companies will be given access to the market of concessions in the EU, estimated to total $1.6 trillion. The import, export, and traffic of goods are also expected to be made quicker and have costs reduced.