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Mercosur-EU agreement may take time to come out, says Brazilian ambassador to Portugal

The agreement between Mercosur and the European Union may take time to be ratified, according to Raimundo Carreiro, Brazilian ambassador in Portugal.

“Unfortunately, despite the positive milestone of concluding negotiations in 2019 and the advanced stage of the legal review process of the agreement, there is still no clear perspective as to when it will be possible to proceed with its signature and start the ratification process,” he said. the ambassador at a Lide group event in Lisbon.

Carneiro stated that ratification is a complex issue that demands in-depth discussions in the European Union.

Last week, on a visit to Brazil, the Prime Minister of Germany, Olaf Scholz, said that the agreement is in the interest of both regions. Lula has also been talking about the need to move forward with the agreement, as in the meeting with the president of Uruguay, Luis Lacalle Pou, on the last 25th.

The ambassador stated that if it takes effect, it could increase Brazilian exports to Europe by up to US$ 100 billion in 15 years, in addition to attracting investments of US$ 113 billion to Brazil.

By 2035, the agreement could increase the Brazilian GDP by US$ 87.5 billion, a figure that could rise to US$ 125 billion if indirect productivity gains are considered.

“It would be a watershed. It is like a new opening of the ports to the global market”, stated the ambassador.

New perspectives

According to Carneiro, there are two themes that open up new prospects for economic relations between Portugal, Brazil and the European Union: the agreement between the European bloc and Mercosur and the change of government.

He recalled that in his inauguration speech, Lula said he intends to resume Minha Casa Minha Vida and structure a new PAC to generate jobs. For this, he intends to seek funding and expand national and international cooperation.

“This process tends to develop through partnerships with the private sector. The Federal Government’s Partnerships and Investments Program has 145 projects in its portfolio. Portugal ranks as the seventh largest potential investor”, said the ambassador.

Carneiro added that current conditions are conducive to a new wave of expansion of Portuguese investment in Brazil, on a par with that which occurred in the 1990s, when the country was the gateway to the internationalization of many large companies in Portugal. “It is a natural path for Portuguese companies, taking into account the size of the Brazilian market and the common language.”

chain of trade

Trade between Brazil and Portugal in 2022 was US$5.3 billion. The European country is only the 18th export destination for Brazilian products.

Around 60% of Brazilian exports to Portugal correspond to fuels, and a good part is due to the internal trade of Galp, a Portuguese oil company that operates in the Santos Basin. Another 20% of exports are agricultural products, mainly soybeans and corn.

For the ambassador, it is necessary to diversify the export basket for trade between the countries to advance.

“The tendency is for this situation to improve in the short term, in view of the strategic partnership with the Portuguese in the area of ​​the aeronautical industry. In this market, Embraer stands out: in 2019, the company sold five KC-390 aircraft to the Portuguese government, which should be delivered to the Portuguese air force from 2023, for the amount of 872 million euros”.

Carneiro added that three branches are strategic and can increase complementarity between the countries: fertilizers, renewable energy – with emphasis on green hydrogen – and public works.

The war accelerated Europe’s energy transition, which will need an additional 2,000 gigawatts of installed renewable energy capacity to meet decarbonization targets by 2050, points out the ambassador.

He cited a study that shows that Brazil has the potential to supply almost a third of that, or 700,000 gigawatts of renewable energy.

The ambassador recalled that in April the thirteenth Brazil-Portugal Presidential Summit will be held in Lisbon – the first bilateral Chamber since 2016 – and could boost Brazil-Portugal relations.

Source: CNN Brasil

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