OF EUROPEAN NEOCOLONIALISM AND THE EU MERCOSUR AGREEMENT

 

An agreement between the European Union and Mercosur, of which Brazil is the main partner, only has value for Brazilian society if it produces results in our social and economic development. Europeans take good care of themselves, but we need to be convinced that there will indeed be tangible benefits for Brazil. And recent studies by IPEA and an independent think tank from Germany, show the opposite.

 

What is on the table and was negotiated by the liberals of Paulo Guedes in the Bolsonaro government creates an economic imbalance between the future of development, not theoretically of the two blocks, but of the increase in income and social improvement of the populations of the countries of the two blocks. Making a long story short, Europe will grow more at the expense of the increase in our technological, service and industrial dependence. Europeans, who are already the largest investors in Mercosur, and special in Brazil, are also the largest recipients of dividends and beneficiaries of protected access to the Brazilian market. And the biggest beneficiaries of a jaboticaba system of public concessions.

 

European companies are rare in Brazil, in fact what confirms the rule, which belong to the world class of production. Or that they introduce in Brazil the latest technologies in their services. Or that they equal their management standards to the level of requirements in the environmental area or in management transparency and apply ESG equal to what they do in Europe. Here are also second-tier products, see for example the automobile industry, where it is the Chinese who lead the race for more efficient cars in Brazil, and with the quality, the recall is a daily act, different from European standards.

 

In the area of concessions and telecommunications services, as well as in financial services, the champions of complaints at Procon are European companies. To this is also added the fact that many of them, as in the case of Cassino, owner of Pão de Açúcar, theoretically do well in Brazil, but sustaining management errors in the headquarters with high profits in Brazil.

 

Of course, the business scenario is not as pessimistic as the one described above, but the agreement between the two blocks also does not guarantee that we will have an investment growth and a technological re-adequacy of our economy. In fact, the studies that exist do not prove that, in addition to greater commercial flow, we will have a qualitative growth in our development. The forecast of IPEA is that GDP will practically not grow and that deindustrialization will be brutal. The opening of the market will not be the same, for the simple reason that, if we do not improve the technological stage of our industries and reduce Brazil cost, we have little to export to the EU other than agricultural products that have more limitations and restrictions than incentives. Try to export industrialized coffee to Europe to displace Germany as the largest exporter of industrialized coffee, to see what happens. Or how are you going to export machines from a technologically strangled industry? By the way, for how much of the industry do we have stock and technological control in Brazil?

 

An agreement of this nature, whose negotiation is based on the analog economy and is being designed for an AI and digital economy, should be based on our vision of the future and its respective development project. Brazil 2050. And we don't have that.

 

The EU missed the step in the negotiations and to say that our cultural ties should be the basis for the agreement is to tell us that we should be grateful to the Europeans who eliminated the Indians to plunder the continent and continue paying the tithe. Either we find a proposal for development as much as possible egalitarian, and of reciprocal future gains, or what has been negotiated so far will be a victory for Pyrrhus, leading the country to a worse situation than the one we have today.

 

The EU's announcement to help the 33 countries of Latin America and the Caribbean with 45 billion euros over a few years, i.e. approximately 1.5 billion per country, is to cover the sun with a sieve. Or more or less, one deceives me that I like it. And where Europeans want to invest, the results will be meager or insignificant for social development.

 

Europe really needs this agreement, it needs less demanding and growing markets, but it wants everything and gives little. The EU does not recognize our ingenuity in the area of energy, especially ethanol, nor in agriculture, forest management and in the area of cellulose. We also have certain skills where we are competitors. But, in macroeconomic terms, we do not have a clear idea of how we develop, how we will face the new technological challenges, social challenges and employment, and how we will move from the frame of an agricultural and mineral power, to one of integrated power. And Europeans, which is understandable, take advantage of this. Our luck is that the greed to always want more and continue to see on the continent (where we still have European colonies such as French Guaina, Holanesian Antilles) a dairy cow that helps to sustain their economies, leads to the postponement of the negotiations and reflections that brake the agreement.

 

That we have to understand each other better and increase our ties in all fields, there is no doubt. But doubt kills, if we don't know what we want and the two parties understand that winning wins also requires moments to give in. In fact we have more in common than less, we have an excellent trajectory of cooperation and business, but we need to turn this into a partnership of equals aiming at a different world in the future.

 

The agreement, as it is patched after twenty years, is simply a disaster for the Mercosur countries. Whoever signs it on this side of the Atlantic, will go down in history as a gravedigger of the country's development.

 

https://drive.google.com/file/d/1xCuMccT2rUISnqts5ZBXF7vxgapEWYZf/view? Usp=drivesdk

 

Friedrich Ebert Stiftung,2021

 

https://drive.google.com/file/d/1qqpFgbf-_Ig3wIiNHv2LxwH8A1riXn-J/view? Usp=drivesdk

 

IPEA conjuncture letter, July 2023.