“Europeans have a hard time imagining the size of Brazil in a tangible way, as the 28 Member States of the European Union together have roughly the same geographical dimension as the Legal Amazon. An understanding is still lacking, for example, about Brazil's natural biomes. The association in terms of agribusiness image with the Amazon biome is due to this geographical misunderstanding .” The analysis is by French-British economist Emily Rees, former French adidas in Brazil and expert in EU trade negotiations, international policy and regulatory processes, guest speaker this week at the 7th South American Agriculture Forum, that is held in Curitiba.
Founder of Trade Strategies, based in Brussels, Belgium, Emily points out that the deal is an opportunity for the country to introduce its professional and sustainable agribusiness to the world. Check out the main excerpts from the interview:
In general, will the agreement between Mercosur and the European Union be beneficial to Brazil? If so, in what respects?
The agreement opens many opportunities for agricultural sectors, in particular, to access the European market on favorable terms, either through tariff elimination, such as orange juice, cachaça or instant coffee, by expanding quotas or reducing intra-quota tariffs for agricultural commodities. On the other hand, the importation of European inputs and products should improve the competitiveness of Brazilian companies, either in the domestic market or in international competition. But trade between the two blocks also means opportunities for economies of scale in terms of commercial logistics and particularly port logistics.
Should the agreement project Brazil further into foreign trade?
The agreement between the European Union and Mercosur also allows Brazil to align with its major competitors, which already have trade agreements with the European Union. It is important to remember that the EU already has 44 trade agreements in place, so it will be a significant gain also against competitors like the United States, which have no preferential agreement with this block. Despite being one of the largest economies in the world, Brazil is still relatively closed to trade when comparing exports and imports relative to GDP. In this way, the Europeans are quite unaware of the country and it will be very important to do a dissemination work to demystify some beliefs that Europeans have in relation to Brazil.
When does this treaty between the South American and the European bloc come within the global context?
Today the foreign trade picture is quite different from what it was 20 years ago. We are experiencing a period of growing protectionist policies around the world, so I believe the two blocs are eager to finally close negotiations and see the political settlement come out while we have this window of political opportunity. In terms of ratifying the agreement, I am very optimistic, which does not mean that we will not have some complexities in this process ahead.
What steps still need to be completed for the agreement to take effect?
There are several steps ahead in the coming years on the European Union’s side. Firstly, in the coming months, there will be a legal verification of the texts that were agreed between the two blocs, with negotiators on both sides doing this work. Once this legal check is done, the final text, with all chapters, will be translated into the 24 official languages of the European Union. On this basis, it may be referred to the Council of the European Union, which represents the interests of the Member States, for vote. Each Member State should take a stand, remembering that at this time it is quite possible for us to have 27 members because of the United Kingdom’s planned departure towards the end of the year. Once the agreement has been approved by the European Council, the text will be put to the vote in the European Parliament, which does not mean the debate in Parliament will start immediately, with MEPs wanting to position themselves and know more details in preparation for the big vote that will be held in Strasbourg, France, headquarters of the European Parliament. Once the agreement has a positive vote in the Council and Parliament, it can enter into force provisionally from the European Union and be subsequently sent for ratification at national level by the parliaments of the European countries.
What is the main barrier that Brazilian agribusiness still needs to break in relation to Europe?
Europeans find it difficult to tangibly imagine the size of Brazil, as the 28 member states of the European Union together give roughly the same geographical dimension as the Legal Amazon. There is still a lack of understanding, for example, about the natural biomes of Brazil (Pampa, Atlantic Forest, Caatinga, Pantanal and the Cerrado). The association in terms of agribusiness image with the Amazon biome is due to this geographical misunderstanding. Thus, a debate around the ratification of the agreement will present an opportunity to demonstrate the sustainability of Brazilian agricultural production for Europe, but also for the whole world.