Optimism grows over Brazil free trade deal

Man on a mission: Economics Minister Johann Schneider-Ammann Keystone

Once stalled, a free trade agreement with the South American regional coalition Mercosur – of which Brazil is a part – is looking more likely, says Economics Minister Johann Schneider-Ammann, who is on a three-day visit to the country.

The Brazilians, Latin America’s largest economy, have shown themselves more open to discussions on the issue, he told journalists in the capital, Brasilia, on Thursday.

Almost 14 years ago the European Free Trade Area (EFTA), of which Switzerland is a member, concluded an agreement with Mercosur – a customs union formed in 1991 that today comprises Brazil, Argentina, Venezuela, Uruguay and Paraguay. The aim was to sign a free trade accord, but negotiations have since been put on ice.

During his first visit to Brazil in 2011, Schneider-Ammann was rebuffed in his attempts to start exploratory talks. The Brazilians said there needed to be consensus within Mercosur first.

But his second attempt appears to have fallen on more receptive ears, he said, after meeting Ricardo Schaefer, the deputy industry and trade minister and Foreign Minister Luiz Alberto Figueiredo Machado.

Months

Schneider-Ammann said he was sure that talks would now take place via a joint EFTA and Mercosur committee.

“It’s a question of months,” he said. “I am under no illusion, but I believe that these talks will take place, at least in a first phase.”

Brazil’s softer stance is thought to be due to the progress make in free trade negotiations between the European Union – of which Switzerland is not a member – and Mercosur.

Obstacles remain, however, in talks between Switzerland and Brazil: Switzerland wants free trade for its industrial products but Brazil is more interested in lower duties on its agricultural products – a move which Switzerland has not shown itself open to in the past.

BRIC progress

Switzerland is keen to strengthen ties with BRIC countries: Brazil, Russia, India and China. It has already signed a free trade deal with China, but those on India and Russia are on hold. The Russian move is in response to the crisis in Crimea.

Already signed during the trip is an agreement between Brazil and Switzerland on social security, similar to what has been signed with 44 other countries.

Brazil is now the world’s seventh-largest economy and Switzerland’s main trading partner in Latin America. It is of growing importance to Swiss companies, an economic ministry statement said.

Schneider-Ammann is also on a scientific mission to Brazil and will, among other duties on Friday open in Rio de Janeiro a swissnex, a network which promotes Switzerland as a science and innovation location by connecting researchers and entrepreneurs.