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ECONOMY | 01-10-2021 01:37

Brazil’s Guedes lets rip at Argentina, vows to ‘modernise’ Mercosur

Brazilian Economy Minister Paulo Guedes says Argentina should "withdraw" from the Mercosur if President Alberto Fernández's government feels "uncomfortable" with Brasilia's plans to "modernise" the South American trade bloc.

Brazil's Economy Minister Paulo Guedes says that the Mercosur will be “modernised” and that if any country feels uncomfortable with this position, it would be best for it to "withdraw" from the regional bloc.

"If Mercosur does not offer to be an integration platform service, those who feel uncomfortable should leave, because we are going to modernise it. Argentina said 'Let those who feel uncomfortable leave,'" the minister recalled.

"Now, we are giving that back to Argentina and we are telling those who feel uncomfortable to leave," said the official from President Jair Bolsonaro's government, who warned Brazil would not "accept Mercosur as a tool of ideology."

The Brazilian minister delivered the statements during a seminar organised by the International Chamber of Commerce.

"There are three that want to change Mercosur and Argentina does not,” said Guedes, referring to Brazil and the trade bloc’s other members, Paraguay and Uruguay.

“We understand that it [Argentina] cannot open up now, because of its complicated economy, but we told it that we are giving it a waiver to return in two or three years, so that this does not prevent us from moving forward," he added.

The "modernisation" to which the Brazilian minister alludes is a possible reduction of Mercosur's external trade tariffs. A debate is also raging about the ability of member states to negotiate agreements with other countries independently, rather than negotiating as a single bloc.

Uruguay, under the presidency of Luis Lacalle Pou, has moved in this direction via talks with the Chinese government.

"It is a gradual, safe and irreversible opening, the time is now because inflation is rising, it is a good time to open imports, a good time," Guedes stressed.

He admitted that Brazil os "in a dispute with Argentina, we want to lower all tariffs this year and if we move forward with tax reform, we want to lower 10 points more next year."

Guedes considered that both Brazil and Argentina "were prisoners of a platform that is not effective," and stressed that Uruguay and Paraguay had benefited most from the creation of the South American bloc created in 1991.

"Our position is to move forward – we are not going to leave Mercosur," Guedes declared.



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