As Latin American nations continue negotiations with the EU over a wide-ranging trade deal as part of the Mercosur trading bloc, the decades-long debate has hit renewed stumbling blocks over accusations of protectionism in “a green guise”. Elsewhere, the Brazilian president has turned his attentions towards Africa, which he said at the end of last week could hold even more trade potential for his country than Europe.
‘Green protectionism’
Brazil’s foreign trade secretary, Tatiana Prazeres, has vowed that the country will push back against “green protectionism” as part of its G20 presidency. Levelling particular criticism at the EU’s Carbon Border Adjustment Mechanism (CBAM), she said that some nations were using sustainability as a cover for protectionism.
“Our concern is that trade is not unnecessarily affected by measures adopted in the environmental area”, Prazeres insisted in comments detailed by The Brazilian Report last week. She contended that the EUs’s CBAM is not sufficiently “based on science”, and said that Brazil sought transparency around how green trade measures are consulted on and developed.
“Many countries are actually using the sustainability agenda to promote their protectionist interests. There are a lot of measures that have no scientific basis and, in short, have a green guise.”
A G20 ministerial meeting in Rio de Janeiro next week is likely to see discussion of CBAM, though Prazeres stopped short of demanding the levy be scrapped. It follows criticism from Brazilian politicians of the EU Deforestation-Free Products Regulation, which is likely to affect several commodities exported in large volumes by Brazil.
The way to Chancay
A new US$3.5bn deep water port is being developed in the coastal Peruvian town of Chancay to consolidate China’s strengthening trade ties with Latin America as part of China’s Belt and Road Initiative (BRI).
The Asian country has become the continent’s largest trade partner in the last decade, as noted by Reuters in a report last month on the development. Peru, which traded marginally more with the US a decade ago, now has a trade turnover with China $10bn larger than the one it has the US.
The port will be majority-owned by Cosco Shipping, a shipping firm owned by the Chinese government. The Chinese and Peruvian governments expect a reduction in the time of export on the largest cargo ships by two weeks in some industries.
Industries which the governments hope to accelerate through the increased capacity and speed of export include copper from Peru and Brazilian soy, which is exported through the Panama Canal at present.
Peru's trade minister Juan Mathews Salazar told Reuters that the “mega port” is designed “to turn Peru into a strategic commercial and port hub between South America and Asia”.
Construction began on the port in 2018, but is anticipated to open later this year.
The Brazilian ambassador to Peru, Clemente Baena Soares, called it “an opportunity for grain and meat production – especially from Rondonia, Acre, Mato Grosso and Amazonas – to go to Asia.
“[Brazilian businesses] are delighted with the possibility of not using the Panama Canal to take their goods to Asia.”
White House adviser Juan Gonzalez suggested that Latin American nations ensure there are “no strings attached” to the developments associated with the BRI projects in which they take part.
EU-Mercosur deal in pieces?
A trade deal between the EU and the Mercosur group of Latin American nations may be impossible to achieve in a form that “makes everyone happy”, said Argentinian foreign minister Diana Mondino yesterday (20 February).
She did, however, suggest a deal could be done piecemeal at a joint press conference with French foreign minister Stéphane Séjourné. Agreements could be reached for individual sectors, the two suggested in comments reported by La Prensa Latina.
“Fractional” agreements could be one way forward, the ministers argued, following the failure of the EU and Mercosur to reach a sweeping trade deal following a resolution to do so in 2019.
“We can look at other types of agreements in the economic, cultural, and other fields,” said Séjourné, who is set to sign off a project between French Development Agency and the Argentinian province of Santa Fe today before travelling to Brazil tomorrow for the G20 foreign ministers’ meeting.
Lula in Africa
Brazilian president Luiz Inácio Lula da Silva delivered a speech on a visit to the 37th African Union (AU) Summit in Ethiopia on Sunday (18 February) to say that “the little that Brazil has, we want to share with Africa”.
Lula spoke in strong terms on adopting a “policy of integration between Brazil and the African continent”, and said that the potential for trade with African nations outstripped that with richer nations in Europe.
“With most of the countries considered rich in Europe, our bilateral trade, the flow does not exceed [US] $8–9m. And with developing countries, our trade is much greater, and the possibilities are enormous.”
He called for stronger trade ties between Brazil and Ethiopia in particular, lamenting that “there is no explanation” for such populous countries’ trade turnover amounting to only $23m. Preferential agreements should be sought on the green transition and environmentally friendly agriculture, he added.
Cameron in Falklands
UK foreign secretary Lord David Cameron is paying a visit to the Falkland Islands today, after he yesterday addressed a call last month from Argentinian president Javier Milei for the UK to cede the territory to Argentina.
The BBC reports that Cameron described the islands as “a valued part of the British family”, and reiterated the position that their status as a British territory was not up for debate “as long as they want to remain part of the family”.
While Milei has said war with the UK over the territory “is not a solution”, he suggested that the UK hand it over voluntarily. The UK Foreign Office response was to “agree to disagree, and do so politely”.
A referendum of Falkland Island inhabitants in 2013, where turnout was 90%, saw 1,513 islanders vote in favour of remaining a UK territory and three vote to join Argentina.
