Few days before the first round of the Brazilian presidential elections on October 7, it is highly risky to make any reasonable forecast about who will win a likely second round. For the time being the possible political and economic evolution after the elections seems to be unpredictable. But the good news is that since the return of democracy Brazil has always found a reasonable way to overcome all kinds of difficulties.
In any case that’s only one of the reasons why it is very difficult – almost impossible – to make any serious prediction, concerning the eventual impact of the final results of the Brazilian presidential elections in what could to be concrete international economic policy issues, including Mercosur trade negotiations.
What could eventually be easier is to predict which could be some of those issues that will require the attention of the elected President, even before he or she begins his or her mandate.
It seems that at least three issues will require the attention of the new Brazilian President even before the inauguration day.
The first one will be the G20 Summit in Buenos Aires at the end of November. Eventually the elected President could not attend the meeting. But even if he doesn´t go, it seems very difficult for him not to give his opinion about some of the key issues of the formal or informal agenda of the Summit. Most probably one of these issues will be the recognition that the rule-oriented multilateral trade system requires some kind of revision. That was the main result of the recent Ministers of Trade Meeting in Mar del Plata. The Summit will be one opportunity to perceive the role that the new Brazilian President – even if he doesn't attend the BsAs Meeting – will have in the definition of a common Latin-American position concerning the future of the WTO and about its role in the international trade system.
The second one will be the Mercosur Presidential Summit that should take place at the end of the year in Uruguay. This will be an opportunity to appreciate the position of the elected President concerning future developments of a regional economic integration process that has lost some of its attractiveness, not only for the citizens of the member countries but also for other nations, and especially for those having to decide about future productive investments in the Mercosur region. The signals that could be perceived of his meetings with the Presidents will have an impact on how other nations and investors could imagine the role of Brazil in the future of Mercosur.
At least three questions will be raised by those trying to draw conclusions of the Presidential Summit: a) what concrete steps are the Presidents of Mercosur countries proposing to continue their political decision of working together among the member nations?; b) how to improve the degree of flexibility of the rules agreed for Mercosur with the predictability required by the enterprises making productive investments decisions for the enlarged common market?, and c) which are some of the future cooperation steps that could be develop together with the Pacific Alliance countries as well as with other Latin American nations, for example taking advantage of the mechanism of “partial scope agreements” included in the 1980 Montevideo Treaty that established the Latin America Free Trade Association (ALADI)?
Obviously, the concrete signals that could result of the meetings between the new Brazilian President and President Mauricio Macri from Argentina, will be also crucial for any forecast about the future of the relations among the two nations that have played in the last thirty years a relevant role in the development of the idea of integration, not only in the Southern Cone but also in the Latin America region. As has been in the past, the frequency and quality of the personal relation among the two Presidents will continue to have a strong influence in the evolution of the cooperation between both nations.
And the third issue will be about the steps that could be undertaken by Brazil and its Mercosur partners to develop further trade negotiations with the European Union, China and other regions or nations – including the United States – and, in that way, to advance in the development of a network of preferential agreements with the participation of other Latin American nations, especially through the accumulation of rules of origin and the different kind of sectorial agreements negotiated within the institutional framework of ALADI.
A first priority could be to give clear signals about the real possibility of concluding the already very long process of bi-regional negotiations with the European Union, and if that is once again not possible, to propose which would be practical credible options.