The vice-president of the Republic and minister of Development, Industry, Commerce and Services, Geraldo Alckmin, said today (27), in the capital of São Paulo, that the trade agreement signed between Mercosur and the European Union should come into force in May.
In an interview with journalists, Alckmin said that his expectation is that the agreement will be approved by the Federal Senate in the next two weeks, followed by President Luiz Inácio Lula da Silva’s sanction. This week, the agreement has already been approved by the Chamber of Deputies.
“Now it has gone to the Senate and we expect it to be approved in one or two weeks. Approved in the Senate and signed by President Lula, we will have about 60 days for it to come into effect. That is the plan. So, if we manage to resolve it in March, the agreement can come into force by the end of May”, he said.
This Thursday, the Argentine Parliament ratified the agreement, as did Uruguay.
European Union
This Friday, the European Commission announced that the bloc will provisionally apply the free trade agreement with Mercosur to ensure the bloc gets the first-mover advantage.
Normally, the European Union awaits approval of its free trade agreements by the bloc’s governments and the European Parliament. However, parliamentarians, led by French deputies, voted last month to challenge the agreement in the bloc’s highest courtwhich could delay its full implementation by two years.
Approval by the EU assembly remains necessary, but the EU and Mercosur could start reducing tariffs and implementing other trade aspects of the deal before then.
Safeguards
According to Alckmin, today a proposal was sent to the Civil House so that the safeguards provided for in the agreement, which are mechanisms that allow tariff reductions to be suspended in the event of a surge in imports. After passing through the Civil House, the text will still be taken to the Ministry of Finance and Foreign Affairs, so that it can then be sanctioned by President Lula.
The government’s expectation is that these safeguards will be regulated in the coming days. “The agreement provides for a chapter on safeguards. We hope that in the coming days, even before the Senate vote [sobre o acordo]that safeguards be regulated”, said the vice-president.
According to Alckmin, the logic envisaged for opening markets is that there will be gains for society, which will be able to buy better quality products at a lower price. “Now, if there is an import surge, you need a safeguard, which suspends that tax reduction. This is planned for Europeans too and that is what will be regulated.”
About the agreement
Mercosur will eliminate tariffs on 91% of European goods within 15 years. The European Union will eliminate tariffs on 95% of Mercosur goods within 12 years.
The agreement establishes the largest free trade zone in the world, with more than 720 million inhabitants. The Brazilian Export and Investment Promotion Agency (ApexBrasil) estimates that the implementation of the agreement could increase Brazilian exports by around US$7 billion and increase the diversification of Brazilian international sales, benefiting the national industry as well.
*with information from Reuters Agency
