Brazil's Next President Is Looking to Shake Up Mercosur

Nov 30, 2018 | 12:00 GMT

The headquarters of Sao Paulo's Stocks Exchange (Bovespa) in downtown Sao Paulo, Brazil, on Oct. 29, 2018.

President-elect Jair Bolsonaro has vowed a fundamental change in direction, including in business and trade, for the giant Latin American country of Brazil.



  • Brazil's new government will try to spur economic growth by pressing the Common Market of the South (Mercosur) to lower its import tariffs and to do away with restrictions that prohibit bloc members from signing bilateral trade agreements. 
  • A presidential election in Argentina means Mercosur has a narrow window of opportunity for altering the bloc's trade policy. A populist victory at the polls will add uncertainty to the negotiations.
  • If Argentina ends up delaying a charter charge, Brazil could threaten to leave the bloc as a pressure tactic.

In 2019, Brazil will pressure its trade bloc partners to make the most significant policy shift in the organization's recent history. President-elect Jair Bolsonaro takes office in Brasilia on Jan. 1, and the new administration will negotiate with the three other full members of the Common Market of the South (Mercosur) to lift the restrictions that prevent member states from negotiating and signing bilateral free trade agreements. Brazil needs the unanimous consent of Uruguay, Paraguay and Argentina for the change. Though they appear willing to vote for it, Argentina remains the wild card in negotiations, mainly because of its October 2019 presidential election. A close race for President Mauricio Macri could make him reluctant to lend Bolsonaro a hand in amending the policy....

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