Brazil and Mexico seek agreement to expand trade

The governments of Brazil and Mexico will begin negotiating a significant expansion of their tariff-reduction agreement, which now encompasses about 800 products. The idea is not only to include new goods and cut tariffs, but also add new elements, such as services, government procurement and intellectual property.

“What we will seek is, as far as possible, a full trade liberalization,” summed up Ambassador Antônio Simões, undersecretary-general for South and Central America and the Caribbean of the Brazilian Ministry of External Relations. “The idea is to work with substantially the entire trade,” he said. The diplomat didn’t use the term free-trade agreement. He preferred to say it will be an “expanded trade agreement.”

In a state visit to Mexico, President Dilma Rousseff said the two countries will start “the most significant qualitative change in the trade relation of the past decade.” She stressed that the current agreement encompasses 800 products, of which 45% have zero tariff. And she said there are about 4,800 products that are not part of any agreement — Brazil and Mexico also have a pact for the auto sector, renewed in March.

“In the shortest possible timeframe, we will produce the growth and the balance of bilateral trade, with the inclusion of new sectors, with products that are unfortunately out. This way, the trade has all conditions to accelerate, diversify and expand.” Ms. Rousseff said she considers it possible to double the trade between the two countries in a few years — in 2014, trade flows amounted to a little more than $9 billion. Mexico’s President Enrique Peña Nieto said the two countries are reinventing their relations. Ms. Rousseff agreed and recalled these are the two largest economies in Latin America.

Brazil and Mexico also signed Tuesday a cooperation and investment facilitation agreement to give more predictability and security to companies. There was also an agreement about aviation services, which is likely to increase the number of flights between the two countries, and the signing of a memorandum of understanding for touristic, fishery and aquiculture cooperation, in addition to documents regarding natural resources’ conservation, use and sustainable development. There was also a memorandum of understanding between the Brazilian Development Bank (BNDES) and the National Foreign Trade Bank of Mexico (Bancomext). 

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