Even in the face of opposition from France, it should benefit the country beyond improving trade flows. The opening of Brazil via exports should pave the way for the subsequent entry of small and medium-sized French companies into the regional market, assesses the president of the France Brazil Chamber of Commerce, Thierry Besse, in an interview with InfoMoney.
His assessment is that the agreement would resolve a paradox in commercial relations between France and Brazil, since, despite significant investment by French companies in the country, trade flow is still low, at around 8 billion euros in 2024.
The Chamber of Commerce is an association representing French and Brazilian companies at national institutions.
“The dairy sector, cheeses, all these agro-industrial products with high added value will have an easier time entering the Brazilian market. Also the entire industrial sector, be it cutting-edge industry, private aeronautical sector”, says Besse. “Tens of thousands of small and medium-sized companies, which naturally have more difficulty internationalizing, will be able to take advantage of this new opportunity”
For Besse, the opening of the Brazilian market, the most closed of the G20, lays the foundations for companies, at first, to export their products until they form solid enough bases to decide, eventually, to start an operation in Brazil.
Due to the number of French retailers in Brazil — labor intensive —, companies from the European country are the largest foreign employers in Brazil with 500,000 employees, according to the France Brazil Chamber of Commerce. In 2024, there were 1,300 branches established in the country, with revenue of around R$400 billion.
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The French government voted against signing the treaty in the face of pressure from agribusiness on President Emmanuel Macron. “I see this as a question of internal French politics, which unfortunately generated an irrational reading of the agreement in the short term. France is going through a challenging political moment, but we are working in the opposite direction, celebrating ratification”, says Bresse.
“Our role is representation, working with Brazilian institutions, to provide this visibility for French investments and for all French companies that are not yet present in the country, and I think that with the advent of this agreement we hope to see many more French companies become interested in the Brazilian market.”
Read the interview below:
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InfoMoney: How should the agreement signed between the European Union and Mercosur impact trade relations, especially between Brazil and France?
Thierry Besse: We are enthusiastic about this integration and, therefore, enthusiastic about ratifying this agreement. So, as I mentioned, France has a very strong history of investment here in the country, a stock in 2024 of 70 billion euros [cerca de R$ 437 bilhões]. And, paradoxically, import and export trade flows between the two countries are still modest, at 8 billion euros [R$ 50 bilhões] em 2024.
IM: What expectations can you have about this change in commercial flow?
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TB: From France to Brazil, the beverage sector: wines, sparkling wines, champagne, will certainly benefit and is enthusiastic. The dairy, cheese sector, all these high-value-added agro-industrial products will have an easier time entering the Brazilian market. Also the entire industrial sector, be it cutting-edge industry, private aeronautical sector.
Large companies are already in Brazil, but tens of thousands of small and medium-sized companies, which naturally have more difficulty internationalizing, will be able to take advantage of this new opportunity. Brazil is the most commercially closed country in the G20. The free trade agreement with Brazil is important and puts Europe in an advantageous position in relation to the United States and China.
IM: In the opposite direction, which Brazilian exports to France should increase?
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TB: Brazilian agribusiness is so competitive that it can now export to Europe, despite trade barriers. This flow should intensify. Brazilian industry too.
IM: In practical terms, how does the agreement facilitate the installation of French companies in Brazil?
TB: Many companies do not decide overnight to establish themselves in a country. First, it tries to access the market with exports and then, depending on the performance of the product or service, it may end up deciding to establish a branch or build factories.
IM: Could France’s opposition to the agreement impact this potential improvement in trade relations promoted by the agreement?
TB: It is a matter of internal and short-term politics that, regrettably, ended up degenerating into an irrational reading of the agreement. France’s political moment is challenging and, unfortunately, it ended up positioning itself against the ratification of this agreement. We work in the opposite direction, to celebrate it with enthusiasm because we are convinced that it will be beneficial for both the Brazilian economy and the French economy.
