By Richard Mann
RIO DE JANEIRO, BRAZIL – The free trade agreement between the Mercosur countries and the European Union (EU), announced this Friday, June 28th, will represent an increase in Brazilian GDP of US$87.5 (R$348) billion in 15 years, and could reach US$125 billion if the “reduction in non-tariff barriers and the expected increase in total productivity of production factors” are to be considered. These projections are from the Ministry of Economy.
According to the economic area, there will be an increase in investments in Brazil of approximately US$113 billion as a result of the trade agreement, over the same period of 15 years. “Concerning bilateral trade, Brazilian exports to the EU will generate nearly US$100 billion in profits by 2035,” the portfolio said in a statement.
According to the Federal Government, with the beginning of the treaty with the EU, agricultural products “of great interest to Brazil” — such as orange juice, fruits, instant coffee, fish, crustaceans and vegetable oils — will see their duties “abolished”.
“Brazilian exporters will gain increased access, through quotas, for meat, sugar, and ethanol, among others,” said the Ministry of Economy. “Brazilian companies will benefit from the abolition of tariffs on the export of a hundred percent of industrial products. This will even out competition terms with other partners who already enjoy free trade agreements with the EU.”
The economic area further reported that the agreement will recognize several products, such as cachaça, cheeses, wines, and coffees, as “distinctive to Brazil” and will also ensure “effective access to various service sectors, such as communications, construction, distribution, tourism, transportation, and professional and financial services.”
The agreement between Mercosur and the EU was considered a “historical landmark in the relationship” between the two blocs by the Ministry of Economy.
Together, they represent approximately 25 percent of the world’s GDP, in a market of 780 million people, according to the government.