World 30-10-2018

Experts see an opportunity to make Mercosur more flexible

They say that it is key that the Brazilian opening does not make Uruguay lose preferences.

The appointed Minister of Economy of Brazil, the liberal Paulo Guedes, was very clear with comments that meant kicking the board: Mercosur will not be a priority for his country during the future administration of Jair Bolsonaro, who will seek to open the northern economy to the rest of the country. world.

Uruguayan experts consulted by El País de-dramatized the situation and considered that this is an opportunity that must be seized so that Mercosur seeks to become more flexible. This would preserve the conditions of preferential access to Brazil that the countries of the bloc have. And they understand that, in reality, Guedes' comments do no more than recognize what is already evident: Mercosur was never a priority for Brazil.

The rise to power of Bolsonaro finds Uruguay's sales to Brazil down as a result of the fall of its competitiveness and the prolonged Brazilian recession. According to data from the Exporters Union, sales fell 8.8% in the last twelve months ended September. The plastics grow as the sales of vehicles but there was a big stumble in the export of dairy (fell 42%) and rice (64%). In 2017 sales to Brazil had fallen 9%. Brazil captured that year 13% of Uruguayan exports, for which it was the second destination after China.

The Exporters' Union is very attentive to the possibility that Brazil, whose exportable offer has similarities with the Uruguayan, will gain competitiveness. The president of the trade union, Andrea Roth, told El País that "it transpired that there is no particular interest in Mercosur but this does not mean that there are important changes, since until now the bloc has not worked as we would like".

"It also transpired that Bolsonaro seeks to make reforms, lower the fiscal deficit and position Brazil in the world, where we can see it from two perspectives: on the one hand there is the risk of a country that could be more competitive and that, if we do not improve our competitiveness, it may be more difficult for us to export and compete with it in the world, on the other hand, if it has growth because it is more competitive, we could join that train and trade more with Brazil, "he said.

For consultant Marcos Soto of CSC Uruguay, there will be no attempt on the part of Brazil to dismantle Mercosur because it is good business (Uruguay has a trade deficit with Brazil of US $ 850 million, which increased compared to last year).

"What is coming and with force is an impulse to reduce tariffs in Brazil, which will be in contradiction with the current status of Mercosur." What must be preserved is the free trade zone and perhaps a step down the integration of The opening of Brazil could be a double-edged sword because Brazil is the main market for value-added products, difficult to place in other markets that need to maintain their current advantages in the Brazilian market. They settled here with the sole objective of selling in Brazil taking advantage of the temporary admission, "he recalled.

Anyway, the Brazilian opening would take time. "The Brazilian economy has been very closed and will not open quickly, and Brazil will not make agreements with any country but with those with which it has a complementary economy, it will not agree with China and will be closer to For us, the most important thing is to keep a free trade zone as efficient as possible, "he said.

Ignacio Bartesaghi, dean of the Faculty of Business Sciences of the Catholic University, considered that "for Brazil Mercosur was never important, yes South America and Argentina". "There is a lot of sincerity in Guedes' comment," he said.

"Uruguay should, without dramatizing, take the opportunity to consolidate a free trade zone without exceptions and with less non-tariff restrictions, which would give us back sovereignty to trade in bilateral trade agreements, which is a priority," he said.

"We still have difficulties in closing agreements because of the protectionism that persists in the larger partners." Modernizing the objectives could also favor convergence with the Pacific Alliance and expedite the agenda in the new disciplines of international trade such as services and trade facilitation. and electronic commerce, "he said.

Bartesaghi pointed out that Guedes is liberal but the military that supported him is not, and that they have a protectionist tradition like the industry in São Paulo and that can bring contradictions.

"The priority is not Mercosur, Mercosur is not a priority , no, no, that's what I wanted to hear, it's a style that combines with that of the president, we speak the truth, we're not worried about pleasing him," the exasperated Surely future Brazilian finance minister, Paulo Guedes, to an Argentine journalist shortly after knowing the comfortable victory of Jair Bolsonaro in the Brazilian elections.

The affirmation only confirms what Bolsonaro and his innermost circle held during the electoral campaign.

Political analysts and Brazilian diplomats say that with Bolsonaro in the Presidency, relations with the United States will be the closest since the return to democracy. Behind that closeness are the coincidences of the Brazilian president-elect with the ideology of US President Donald Trump.

The possible chancellor of Bolsonaro, Ernesto Araújo, is a career diplomat who in 2017 wrote a book in which he maintains that Trump assumed the mission of rescuing Western civilization, its Christian faith and its national traditions forged "by the cross and by the sword ", reported the Brazilian newspaper O Globo.

Bergara: the Mercosur without certainties

The rise of Jair Bolsonaro to the Brazilian government brings "a lot of uncertainty" to a Mercosur, which for years has been "weak" and that has been "an obstacle to the flexibility" that the government has sought in terms of international insertion. presidential candidate frentista Mario Bergara, former president of the Central Bank of Uruguay.

He acknowledged that if Bolsonaro designs his foreign policy based on his political sympathies, that would not be positive for Uruguay. Bergara said he "has full confidence" that the Frente Amplio has created "reasonable support" so that what happens to the Brazilian Workers Party and thus retain power after the elections next year will not happen to him.

It lashed out at the leader of the People's Party, Edgardo Novick, who celebrated the victory of Bolsonaro euphorically in the streets of Rivera and predicted a front-runner defeat in 2019. "They are not messages that contribute to democratic dialogue," said Bergara.

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