Brazil’s Industry Leaders Want to Bypass Mercosur and Sign EU Accord

Industry numbers A group of businessmen belonging to Brazil's powerful National Confederation of Industry, CNI, said it was time to sign a bilateral agreement with the European Union – which would leave out Mercosur – according to press reports in the daily newspaper O Estado de S. Paulo.

CNI president Armando Montero Neto said Brazil must adopt a more "ambitious" position regarding trade agreements with the European Union. This week, Rio do Janeiro hosted the two day EU/Brazil summit where it was agreed that both parties must speak "with one voice" in the coming Group of 20 major economies meeting in April in London.

"Mercosur has become partly paralyzed and the feeling is that Brazil is shackled with limited movements; Brazil must reach bilateral agreements, Mercosur's time is up, long overdue", said Luiz Furlan president of the São Paulo based food group Sadia in an interview with O Estado.

In 2007 when Brazil and EU signed an association agreement, which opened the way for the summits, Uruguayan officials publicly expressed concern fearing Brazil could end up signing a free trade agreement with the EU, "without the participation of the rest of Mercosur member countries."

Brazilian diplomats at the time discarded such a possibility insisting that the Lula administration would not violate the block's regulations, which impede any Mercosur member to unilaterally sign such agreements with third countries.

EU ambassador in Brazil João Pacheco said then that the EU was not after a unilateral agreement with Brazil but admitted that Argentina, the second most important Mercosur member country had demands in the manufacturing sector that could become obstacles for the agreement with Mercosur.

Ambassador Pacheco also pointed out that the incorporation of Venezuela to the South American trade block, which so far has not happened, (blocked in the Brazilian and Paraguayan legislatives) could interfere with a possible consensus between the EU and Mercosur. These negotiations dating back to the nineties have remained stalled since the end of 1994.

At the recent Brazil-EU summit, presidents Luiz Inácio Lula da Silva from Brazil and Nicholas Sarkozy from France, which holds the EU rotating chair said that Europe and Brazil have a common vision on how to address "not only the financial crisis, but also the need to bring the Doha round of world trade talks to a successful conclusion, the need for alternative energy sources, the need to halt climate change and the need to reform global financial institutions."

This was followed by a bilateral Brazil-France strategic alliance agreement signed by both presidents, which includes US$ 8 billion in military cooperation plus understandings in several other areas.

CNI and Fiesp, São Paulo Industrial Federation, are Brazil's two main manufacturers organizations with strong influence in government and policy making.

Mercopress

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