Bolsonaro’s dissent with Argentina: Brazilian industrialists also criticize his position in Mercosur

Jair Bolsonaro does not generally make categorical speeches, let alone incisive. But this Thursday, during the presidential summit of Mercosur, He looked fiery and it even looks like he didn’t get the tone or words wrong; he was hardly wrong once. On the other side Alberto Fernández, true to his style, took care to avoid the inflection of the voice. The Brazilian went into battle, denying the contemporary intention he was suggesting in a final challenge: “With Argentina we have no rivalries except in football,” he said. And then, laughing, he hit his colleague from Buenos Aires: “We’re going to beat them 5 to 0”. He was obviously referring to this Saturday’s match at the Maracana, in the city of Rio de Janeiro.

As is the practice on the block, the opening speech of the summit highlighted Alberto Fernández, who had held the presidency of the common market in the first half of the year. How could it be otherwise, he stressed on several occasions that the bloc requires its four members, that is to say also Uruguay and Paraguay, to settle any measure to be adopted by ” consensus”. A colleague from Rio came to count the times Alberto repeated this word: “There were 8” commented.

But there is nothing to question in this reiteration. It means to remind you, to the three other members, that in this “regional club”, the policies to be developed or modified require the agreement of all. So much emphasis on the issue came from an attitude assumed the day before by Uruguayan President Luis Lacalle Pou. Until now, the young president reached the semi-annual summits via zoom. And then, he could not have the rich experience of these face-to-face meetings, where not only presidents but also ministers and technical officials meet face to face.

The truth is, Uruguayan diplomacy has done a bad job. On Wednesday, during the meeting of the Common Market Group, which brings together economy ministers and foreign ministers, he indicated that Uruguay had decided to follow its own path and would join forces with other countries outside of the region without waiting for its three other allies; but he would still stay in Mercosur. To the Uruguayan Lacalle Pou, Alberto Fernández reminded him that Mercosur works, in this sense, like the European Union: protocol standards must be respected. And if a country wishes to operate outside this legal body, it will lose full partner status as happened with England in “Brexit”, which involves “costs and disruption”.

“Mercosur was a trap for Brazil”, said Minister Paulo Guedes

But if Montevideo wanted to bring down a piece of the chessboard in an untimely way, claiming to celebrate its own alliances with other nations, Brasilia’s position this time was different: it did not support the Uruguayan announcement, because it lacked “practical and legal effects”. And instead, he decided to “fight” for his plans. For Brazilian diplomacy, this is now another matter: rapidly reducing the common external tariff (CET), which would allow Brazil to enter more easily into what are called “global production chains”, which was one of the central axes of the project. by Minister Paulo Guedes.

“By keeping us closed, Brazil has been harmed,” the minister said at a conference last June. And he added: “Mercosur was a trap for Brazil by preventing for our country to join global value chains ”. If, as the official asserts, the Brazilian economy “has remained closed for many years”, the solution he proposes: to reduce the customs tax and “increase the degree of integration” with the world, is not only lacking regional but even national consensus.

The extent of the divergences in Mercosur

Bolsonaro left no doubt about the project. He first criticized the Argentine management of Mercosur, since the end of December: “The semester that ended did not meet the expectations and needs of the modernization of the block. We should have presented concrete results on the two issues that mobilize our efforts the most: the revision of the common external tariff and the adoption of flexibilities to negotiate trade agreements with external partners ”. These two questions are at the heart of the differences between Brazil and Argentina.

The President then went straight to the point that interested him: “We do not want Mercosur to be seen, as it has been until now, as synonymous with inefficiency and lost opportunities. Brazil will focus (henceforth) on the privilege of modernizing the bloc’s economic agenda ”.

Addressing the Globo newspaper, Ambassador Pedro Miguel da Costa e Silva, Itamaraty’s secretary for bilateral and regional negotiations, admitted that in the second half of the year, already in the exercise of the presidency pro tempore, Brazil will give priority to “an agreement on the reduction of the rates of the common external tariff”. The diplomat warned that they were aware of the differences with Buenos Aires, “but the goal is to build a positive agenda.”

It happens that IThe “differences” not only separate the governments of Brazil and Argentina. The imbalance that permeates the respective positions also has a component in Brazilian domestic politics. A joint statement from the National Confederation of Industry (CNI) and several Brazilian workers’ unions, warned two weeks ago against the project that moves Guedes and therefore Bolsonaro: “The position of the Brazilian government on liberalization exchanges are not accompanied by a clear plan; there were no consistent consultations with industry segments or impact assessments ”. Consequently, they asked Mercosur to suspend the processing of these measures. LThe entities believe that the option claimed by Brasilia will only “reinforce the trajectory of deindustrialisation” that the country is undergoing.

* Author from Brazil 7 days. From São Paulo, Brazil.