Brazilian exports to rise 13% by 2038 amid full enforcement of EU-Mercosur trade deal, says VP

Brazil's government expects the country's exports to increase 13% by 2038 through the full enforcement of the free trade deal between the South American bloc Mercosur and the European Union, Brazilian Vice President Geraldo Alckmin said on Wednesday.

Speaking in an interview with international news agencies, which included Reuters, Alckmin said industrial exports alone could rise 26% in the same period due to the agreement signed by the blocs in January.

"Tariff cuts are gradual, but you have close to 5,000 products whose duties will be reduced to zero as of May 1, so there will be a significant impact," Alckmin said.

The deal tentatively comes into force on May 1, as some EU members, such as France, have challenged the contentious agreement at the bloc's top court. 

But the gradual removal of tariffs between the EU and Mercosur - which includes Argentina, Brazil, Paraguay and Uruguay - begins immediately and is expected to be completed within 12 years.

According to Alckmin, who served as Brazil's trade minister during part of the negotiations with the EU, sectors that could be immediately impacted include sugar, fruits, beef and poultry. He also noted that Brazilian imports are expected to grow.

"Safeguards apply to both sides. If there is a spike in imports, both Mercosur and EU countries can request a temporary suspension. It is a balanced agreement," he said.

Trade between Brazil and the EU, the country's second-largest trading partner after China, amounted to about $100 billion last year, with a slight European surplus of roughly $500 million.

BROADER US-BRAZIL PARTNERSHIP AND VENEZUELA IN FOCUS

Brazil's government continues to try to negotiate progress on trade with the United States, as it sees opportunities for broader partnership on both tariff and non-tariff issues, Alckmin said.

The Latin American country is currently under investigation by the U.S. government over potential unfair trade practices. Last week, a Brazilian delegation was in Washington for talks related to the probe.

"We provided all the clarifications. And, if necessary, we will provide more," Alckmin said, without elaborating on the meetings with U.S. officials.

He said Brazil aims to build on the "good chemistry" established between Brazilian President Luiz Inacio Lula da Silva and his U.S. counterpart, Donald Trump, last year to broaden the countries' partnership.

Alckmin also said that Mercosur will discuss Venezuela's potential return to the bloc after Washington removed former President Nicolas Maduro in January.

"Venezuela is suspended from Mercosur, but as it is now going through a different moment, this will be reconsidered," the vice president said.

Venezuela was a full Mercosur member until its suspension in 2016 for failing to meet trade and human rights commitments.