Mercosur-Canada Free Trade Agreement and Brazilian Agribusiness
In 2018, negotiations for a Free Trade Agreement between Mercosur and Canada started in Asuncion, Paraguay. So far, 7 negotiating rounds have been held, in addition to virtual meetings to align interests. In terms of forecasting the conclusion of negotiations, it is estimated that they will end between 2021 and 2022.
With the effectiveness of the agreement, it is expected the reduction of customs tariffs on a wide range of products traded between countries, mainly in agriculture, livestock and mining, responsible for about US$133.7 million and US$88 million of Brazilian exports to Canada in 2020.
In general, it is estimated that Brazilian agro-exports will increase by US$8 billion with the adhesion to the agreement, featuring an extremely beneficial approach to Brazil, which, according to the Ministry of Economy, has already presented Canada as the 5th largest trading partner in the export sector in 2020.
According to an analysis carried out by the Confederation of Agriculture and Livestock of Brazil (CNA), based on other free trade agreements ratified by the Canadian government, the forecast is that the reduction in rates will take place in the first year of the Agreement's validity. In addition, negotiations take place simultaneously with 7 other Brazilian trade agreements, which could impact the Brazilian GDP by more than R$1.7 trillion by 2040.
As a result, the Brazilian foreign trade scenario is promising for the coming years, with the deepening of significant trade relations. Thus, the study to implement export becomes a key investment for companies looking to expand their business. In this way, aiming at a better and more assertive result for its internationalization.
By Ana Beatriz Teodoro on 07/21/2021
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