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Brazil’s Future Economic Minister Says Mercosur ‘Will not be a Priority’

Paulo Guedes talked about the next administration's position on this key issue.

By | [email protected] | October 29, 2018 11:58am

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The election of Jair Bolsonaro as the next President of Brazil is set to herald a dramatic shift in the region, not only on political and social aspects – if he follows through with one percent of his statements in favor of torture and against minorities, among many, many others, the setback will be significant – but on economic ones as well.

Merely hours after the former Army captain was proclaimed as the next head of state, his future economy minister, Paulo Guedes, provided troubling a definition over a key component of the bilateral relationship between the country and Argentina: mainly that Argentina is not going to be a priority for Brazil, our largest trading partner.

In a joint interview with Brazilian and foreign press, Guedes, a liberal with a PhD from the University of Chiago, said that neither Argentina nor the Mercosur “are a priority” for the incumbent administration. Asked about the future of the trading bloc – of which Paraguay and Uruguay are also part of – by a Clarín journalist attending the press conference, Guedes assured that “the Mercosur is extremely restrictive.”

“Brazil was prisoner of ideological alliances, something that is bad for the economy,” he added.

After being asked several times by the journalists present about whether the bloc would be dissolved, Guedes was blunt: “Is that what you wanted to hear? I know that style. Argentina is not a priority. For us, trading with the entire world is the priority,” Guedes said.

The stability of the trading bloc is key for the Macri administration, which has been trying to access new markets, especially the European Union’s. Negotiations with Brussels to reach a free trade agreement have been stagnant for months and it is uncertain what will be the effect of Brazil’s new individualistic approach.

This morning, Argentine ambassador to Brazil Carlos Magariños addressed the statement, saying that “in no way” he “imagines the end of the Mercosur,” but conceded that the bloc “has been the least open in the world” and therefore he “welcomed any attempt to open it to the world.”

There have been no talks about a first bilateral meeting between Macri and Bolsonaro yet, although some news sites have already speculated that it might take place on the sidelines of the G20 Leaders’ Summit that will take place in Buenos Aires on November 30 and December 1.

Bolsonaro has repeatedly shown willingness to have a good relationship with Macri, praising him at least twice and calling him on the phone last week.

Macri was quick to congratulate Bolsonaro, saying he wishes both will “soon work together” to strengthen the countries’ relationship “and the well-being of Argentines and Brazilians.”

The Foreign Ministry, led by Jorge Faurie, complemented the message with a statement highlighting that “the elections show once more the strength of the Brazilian democratic institutions,” and indicating that “the strong and historic ties uniting both countries make of Brazil an indisputable strategic partner for Argentina, something that is illustrated by the variety and relevance of the topics comprising our common agenda.”

“The Argentine government renews its willingness to continue working with the new government arising from the choice of the Brazilian people in order to deepen the ties between the two nations and, together, continue working towards the well-being of all Argentines and Brazilians,” reads the rest of the release.

President Macri will have to walk a fine line with his new counterpart, balancing the need to maintain a fluid relationship with the country’s main trading partner but at the same time avoid being associated with a political figure that is more than controversial, to put it mildly.