RIO DE JANEIRO, BRAZIL – The United Kingdom made a proposal for an Enhanced Trade Partnership (ETP) to Brazil, but Brazil’s Ministry of Foreign Affairs (Itamaraty) and Ministry of Economy were disappointed with its terms and resisted taking these negotiations forward.
For the Jair Bolsonaro government, the Enhanced Trade Partnership offer is unbalanced and contemplates London’s interests, but ignores the main demands from the Brazilian side to increase exports to the British market.
Brasília was interested in opening negotiations for a free trade agreement, but the United Kingdom gave several reasons to reject the possibility.
There would be a lack of arms in the technical area to remake a network of trade treaties post-Brexit and uncertainties about Mercosur’s willingness.
This year, for example, marks the 40th anniversary of the Falklands War – a sensitive topic in Argentine politics. In Brazil, the presidential elections reinforce doubts about the future of the customs union.
In contrast, the British have expressed their intention of an Enhanced Trade Partnership, where it would be possible to negotiate what they have called “low-hanging fruits.” London initially considered an announcement about the launch of the negotiation on January 31.
However, the divergence on the coverage radius of the ETP made this attempt impossible. Itamaraty considered the British proposal unacceptable. The economic team also made criticisms, but is still trying to find some loopholes that will allow it to evolve.
Besides the simplification of customs procedures, which is an initiative pleased to both sides, other points presented by the UK were: greater access to financial services and higher education, government procurement (opening up public bidding), and “life sciences” (a term little used in trade jargon, which was understood in Brasilia as the whole area of medicines and patent protection related to these products).
The Brazilian government’s major complaint is about London’s refusal to include sanitary and phytosanitary measures on the discussion table. The UK imports about 70% of the food it consumes. About half of this comes from its former partners in the European Union.
Even with Brexit, these countries continue to have zero tariffs for exports to the British market. However, many producers in the EU had become so unaccustomed to customs procedures – because of the common market – that they preferred not to deal with all the foreign trade bureaucracy anymore and stopped exporting.
It was seen as an opportunity, in theory, for the greater participation of Brazilian food in Britain. Brazil already sells beef, fruits and nuts, juices, and roasted coffee to the British market.
However, producers face restrictive quotas to export chicken meat to the UK. There is no access to pork, fish, and dairy products.
What irritates the Brazilian government the most are barriers to beef. The UK has inherited rules from the EU, and Brazil believes there has been enough time for Britain to reformulate its sanitary measures after the Brexit.
One of the complaints concerns the so-called “pre-listing” – a system by which a slaughterhouse receives immediate approval to export, without prior individual inspections, unit by unit. The EU had “pre-listing” with Brazil, but it was suspended in 2017 due to Operation Weak Meat.
The Europeans kept the prior inspections, but the UK no longer must follow them and the Brazilian government argues that that episode is over. It also protests the sampling of all meat batches that arrive in the country.
In the evaluation of authorities in Brasilia, if there is an expanded trade partnership with unbalanced results and privileging issues of interest to the UK, the British will completely lose their appetite for negotiating a future free trade agreement.
While refusing to discuss agriculture with Brazil, London has concluded a treaty with Australia and New Zealand – two major food producers – covering these points.
For the British government, the criticism is unfair. They maintain that sanitary and phytosanitary measures cannot be negotiated in this way because an independent agency regulates them.
She also mentions the case of India, which had an ETP-type partnership with the UK and then started negotiating free trade.
“We have a window to move forward in the coming months, and Brazil should not look at this as a zero-sum game. It is just a start,” says the UK.