The agreement between Mercosur and the European Union. More than a specific treaty, it can function as a political catalyst favorable to global integration.
This impulse comes to a country whose trade policy was shaped by a developmental diagnosis. The bet on import substitution, anchored in the thesis of the deterioration of terms of trade, according to which commodities would tend to depreciate in relation to manufactured goods, had historical coherence.
The problem was its crystallization: Brazil transformed a context strategy into a permanent arrangement, without testing whether it would deliver a broad, competitive and exporting industry. Spoiler: even decades later they didn’t deliver.
World Bank data indicate that, in 2022–2023, Brazil remained among the middle-income economies with the greatest tariff protection on industrialized goods, above regional peers such as Chile, Mexico and Colombia. At the same time, according to the Mdic (Ministry of Development, Industry, Commerce and Services), less than 1% of formal firms export, a low proportion even when controlling for income.
Trade policy ended up operating as a mechanism for concentrating benefits, while the cost to the population appears in higher prices, less variety and stagnant productivity.
Low integration is also reflected in productive insertion, after all, Brazilian participation in global value chains is limited, with little use of imported inputs in exports. This, in turn, reduces competition, hinders technological diffusion and makes the modernization of the production complex more expensive, hindering economies of scale and learning that more integrated economies capture more quickly.
It is against this background that the Mercosur–EU agreement must be read: a first step in the opposite direction to isolation. It expands access to a relevant market, reduces regulatory uncertainties and creates conditions for greater productive integration. For consumers, more competition and variety put pressure on prices. For companies, especially those dependent on inputs and technology, the gain comes from predictability and lower costs to connect to more sophisticated chains. For the country, it opens up the chance to escape an equilibrium of low integration that has proven costly in terms of growth and well-being.
helps to situate the agreement realistically: as a starting point for a broader integration agenda, whose effects go beyond tariffs and involve rules, standards and predictability. This does not eliminate distributive conflicts or adjustment costs, but it makes them manageable if there are transition policies, such as professional training and requalification, support for worker mobility, credit instruments and technological diffusion for small and medium-sized companies.
Therefore, the political relevance of the Mercosur–EU agreement goes beyond the negotiated text. It can serve as a trigger for a broader repositioning, in which global integration is no longer treated as a concession and starts to be seen as a development project and access for Brazilians to the global market. In a context of negative results from tariff increase policies in the USA, space is opening up for pro-integration coalitions between countries willing to cooperate. For the first time in a while, there is reason for some optimism about Brazil’s integration with the rest of the world.
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