Brazil will push for immediate trade talks with the UK under the auspices of South America’s trading bloc, Mercosur, once Britain’s new foreign secretary Boris Johnson has settled into the job, Brazil’s foreign minister José Serra said.
Mercosur rules require Brazil and the bloc’s other members — Argentina, Uruguay, Venezuela and Paraguay — to jointly negotiate any trade deals with external entities.
“Our idea is to open right away a negotiation between Mercosur and the UK, which has a more open economy and has a very important position in relation to investment in Brazil yet imports relatively little from Brazil,” Mr Serra said in an interview. “As soon as the new minister of external affairs [Mr Johnson] takes office, I will make contact with him to reinforce existing initiatives and explore how to advance them under the auspices of Mercosur.”
The initiative comes as Brazil’s new centrist government, led by interim president Michel Temer, is seeking to launch an aggressive new phase of trade negotiations.
Brazil has few bilateral free trade agreements after the leftwing Workers’ party governments of President Dilma Rousseff — who has been suspended pending impeachment — and her predecessor Luiz Inácio Lula da Silva, emphasised multilateral negotiations.
Some analysts fear the country could be left at a disadvantage by the 12-member Trans-Pacific Partnership being negotiated by the US, Japan and a number of other Asian countries as well as nations on Latin America’s western seaboard including Mexico, Chile and Peru.
Mr Serra’s comments on Brexit come as the UK’s new government led by Theresa May is rushing to prepare trade deals with nations such as Australia so they can be signed immediately upon the country’s formal departure from the EU.
Our idea is to open right away a negotiation between Mercosur and the UK, which has a more open economy and has a very important position in relation to investment in Brazil
Mr Serra, a former mayor of São Paulo, South America’s biggest city, and governor of the state of the same name, is one of the country’s most senior politicians and a leader of the centrist PSDB party. Exiled during Brazil’s military dictatorship, he received a PhD in economics at Cornell University in the US and contested the 2002 presidential election in Brazil.
He said while he expected Brexit to have no long-term impact on relations between Mercosur and the EU, Britain seceding from the bloc could foster more protectionist forces within Europe.
“Brexit could stimulate nationalist movements in countries on the continent, which always or almost always involves some component of protectionism,” he said. “Because you have one of the more liberal members leaving, the level of protectionism on average should rise.”
He said Brazil and its partners in Mercosur were considering what to do about Venezuela, the 25-year-old trading bloc’s fifth, newer member, which is set to take its turn in the presidency this year.
The economic and political situation in the South American country is approaching catastrophe amid chronic food shortages and a deadlock between the government of President Nicolás Maduro and the opposition in congress.
Mr Serra said Brazil was proposing that Venezuela be given until August 12, the fourth anniversary of its membership of the bloc, to fulfil its obligations under Mercosur. So far, it had met only 45 per cent of the prerequisites for membership.
He said that aside from the EU and the UK, Brazil would push for more trade ties with countries such as Iran, China and South Korea. Brazilian exports of agricultural goods to these three countries rose between 21 and 30 per cent in the first half of 2016 from the same period a year earlier.
Brazil was also in talks with India, Canada, Japan and others over various trade-related deals.