Brazilian Steel Industry Criticizes Mercosur-Eu Agreement

The Brazilian steel industry has recently come out in criticism of the Mercosur-EU agreement, citing concerns over the potential impact on domestic manufacturers.

The agreement, which was signed in June 2019 and is currently awaiting ratification, aims to create the largest free trade area in the world. It would eliminate tariffs on 90% of the products traded between the EU and Mercosur countries (Argentina, Brazil, Paraguay, and Uruguay), including a significant reduction in tariffs for European automobiles.

However, Brazilian steel industry associations have voiced their concerns about the potential negative consequences for the sector. In a joint statement, the National Association of Steel Distributors (Anafast) and the Brazilian Steel Institute (IABr) emphasized that the agreement would lead to an influx of European steel into Brazil, putting local producers at a disadvantage.

According to the IABr, Brazil`s steel industry is already struggling with overcapacity and low demand, and the increased competition from European imports could exacerbate the situation. The industry also argues that the EU`s strict environmental and labor regulations give European manufacturers a competitive advantage over Brazilian companies.

The Mercosur-EU agreement has also faced criticism from environmental and human rights organizations, who have raised concerns about the potential impact on deforestation and indigenous communities in the Amazon region. Some European countries, including France, have threatened to block the agreement unless Brazil takes stronger action to combat deforestation.

While the agreement has the potential to bring economic benefits for both the EU and Mercosur countries, the concerns raised by the Brazilian steel industry highlight the challenges of balancing economic interests with environmental and social considerations. As the ratification process continues, it remains to be seen whether these concerns will be addressed and if the agreement will ultimately be implemented.