Mercosur To Finalize Trade Agreement With EFTA; Bolsonaro Also Targets U.S.

RIO DE JANEIRO, BRAZIL – After reaching an understanding with the European Union, the world’s largest trading bloc, Mercosur is now moving towards a free-trade agreement with the European Free Trade Association (EFTA), a rich-country club, which includes Iceland, Liechtenstein, Norway, and Switzerland.

At a press conference on Monday, July 15th, during the Mercosur summit in Santa Fe, Argentina, negotiators from the four member countries (Argentina, Brazil, Paraguay, and Uruguay) said that the agreement is expected to be finalized by August.

Another important negotiation, according to the Argentinian government’s international economic relations secretary, Horacio Reyser, is with Canada. According to him, the prospect is to finalize an agreement by early 2020. Negotiations are also underway with South Korea and Singapore, both of them in the longer term.

Brazilian president Jair Bolsonaro wants to propose a free trade agreement between South America’s Mercosur and the United States once he takes the presidency of the bloc, presidential spokesman Otavio Rego Barros said on Tuesday.

Rego Barros also said the Brazilian Foreign Ministry already has a draft of the request of the agreement for the president’s son, Eduardo Bolsonaro, to become the Brazilian Ambassador to the United States. Bolsonaro has defended naming his son as ambassador, but the appointment would still need to be approved by the Brazilian Senate.

Pedro Miguel da Costa e Silva, the Brazilian coordinator in Mercosur, explains that the agreements are wide-ranging, along the lines of those negotiated with the European Union. “These are agreements that deal with all subjects. These are not only about tariffs, services or government purchases, but they are also cutting-edge agreements,” he said.

Costa e Silva explains that the most sensitive areas are naturally left to the end, which may hinder these deadlines to some extent. He explains that most countries have protected sectors in agriculture. “So, just as the last issues to be negotiated with the Europeans concerned agriculture, these issues are also sensitive to the Swiss and Norwegian markets,” he said.

According to Costa e Silva, some countries wish to negotiate tariffs for products as well as rules. And he quoted Switzerland. “The Swiss are very strong in pharmaceuticals. They are willing to negotiate rules that are favorable in terms of intellectual property. But we also have interests to defend,” he said.

For the full picture, see our Mercosur EU Trade Deal: Complete Guide.