Brazil faces challenges in international trade

ANBA | 6 Nov 2014

Brazil faces challenges in international trade

Sociologist and Human Geography PhD holder Demétrio Magnoli is delivering a lecture on what Brazil stands to lose by not joining trade blocs, while other countries associate via free-trade agreements.

Marcos Carrieri*
marcos.carrieri@anba.com.br

São Paulo – The sociologist and Human Geography PhD holder Demétrio Magnoli is the next guest of the Lecture Cycle hosted by the Arab Brazilian Chamber of Commerce. Next Tuesday (18th), Magnoli will speak on issues such as Brazil’s role and challenges in global trade and investment.

In an interview to ANBA, Magnoli outlined a few of the topics he will cover and asserted that Brazil must address a number of challenges or else become isolated in international trade. His subject matters will include the Mercosur’s role on the international market and the agreements under discussion by the United States and the Asian countries (TPP) and the United States and the European Union (TTIP).

He will also expound on the role of the World Trade Organization (WTO) following the debates of the Doha Round, established in 2001 to encourage the opening of markets under rules designed to benefit the developing countries. By December last year, the WTO had reached a consensual agreement to proceed with the talks. However, in October this year, India stated that it would only accept an agreement to facilitate trade on the condition that it could go on subsidizing its agriculture – the opposite of what the Doha Round advocates.

“Firstly, I am addressing the failure of the World Trade Organization (WTO) to produce results via the Doha Round. This has ultimately made the WTO a court for trade-related issues, which is better than nothing. Secondly, I am discussing the United States’ ongoing talks for two international trade agreements, the TPP and the TTIP, with countries in Asia and the European Union. Thirdly, I will tackle the partial integration of Latin America (into global trade) via the Pacific Alliance, and the Mercosur’s becoming a political body that shuts out global trade,” says Magnoli. The Pacific Alliance is a bloc comprising Mexico, Peru, Chile and Colombia.

According to Magnoli, a columnist for newspapers Folha de S. Paulo and O Globo and an international commentator for TV channel GloboNews’s Jornal das Dez newscast, Brazil must become a member of trade blocs. However, the ideological views of the Brazilian Workers Party (PT), with which president Dilma Rousseff and former president Luiz Inácio Lula da Silva (2003-2011) are affiliated, prevents the country from joining said groups.

Furthermore, the Mercosur, a customs union created in 1995 by Brazil, Argentina, Uruguay and Paraguay and later joined by Venezuela, became a political platform over the past few years. Venezuela and Argentina are against commercial integration and Uruguay and Paraguay are observer countries for the Pacific Alliance, and this exerts pressure on Brazil.

“Some champion Brazil’s moving forward in international talks separately from the Mercosur, but some of the segments within PT are against it,” said Magnoli. He also remarks that part of the PT has “veto powers” on these talks and that Brazilian voters remain largely unaware of this issue. The sociologist warned that Brazil risks becoming isolated if it does not join trade blocs. This isolation would primarily impact upon agribusiness and industry, which could be rendered unable to compete with countries in various blocs.

Yet-timid trade flows

Magnoli also remarked that bilateral trade between Brazil and the Arab countries progressed from Lula’s first term until the beginning of his second term, but hinge on agreements to grow further, as do Brazil’s exchanges with any other country.

“Brazil has worked to further trade with the Middle East and Africa and succeeded, until Lula’s second term began. Proportionally speaking, trade with those countries has increased. Since trade flows used to be negligible, the moment you see an increase, figures become superlative. However, in absolute terms, the volume of trade with them remains low. Our ties with that region have suffered as a result of the Arab Spring. As a matter of fact, Brazil needs to diversify its partners and enter into agreements; sheer will is not enough. What we need is a decision to enter into these arrangements, but the ideological factor prevents that decision,” he said.

Magnoli’s will be the final lecture of the Arab Chamber Lecture Cycle in 2014. Former speakers this year have included the sociologist Eduardo Gianneti, creative cities specialist Ana Carla Fonseca Reis, the historian Arlene Clemesha and economist José Roberto Mendonça de Barros.

Service:
Lecture Cycle
“Brazil, the Mercosur and the global trade and investment scenario,” with Demétrio Magnoli
November 18th, 2014, 7:00 pm
Arab Brazilian Chamber of Commerce, Avenida Paulista, 326, Bela Vista, São Paulo-São Paulo, 11th floor.
Information: +55 11 31474066 or tmachado@ccab.org.br
Free admission

*Translated by Gabriel Pomerancblum

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source: ANBA