New Brazilian President Jair Bolsonaro’s “economic guru,” Paulo Guedes, has suggested that the country could head for a ‘soft Braexit’ from the continent’s fledgling EU-like supranational organisation Mercosur, the ‘Southern Common Market’.

Following the EU model, Mercosur has recently established a parliament with direct elections scheduled for 2020. It has even proposed a single currency, the ‘Gaucho’. The Union consists of Argentina, Brazil, Paraguay, Uruguay, and Venezuela, although the latter has been suspended since November 2016.

Guedes, who is touted as becoming a “super minister” in Bolsonaro’s administration, has slammed the agreement and particularly its customs union, as bad for the economy, calling it a “cognitive prison.” 

“Am I only going to trade with Venezuela, Bolivia or Argentina? No. We will trade with the world, with more countries. We will do commerce. What if I want to trade with other countries?”

Brazil is a country of 210 million people. Leaving Mercosur’s customs union could be a game changer for boosting world trade…

Major South American economies including Brazil are eager to get on with UK trade deal negotiations “as soon as the new minister of external affairs takes office”. Mercosur, a trading bloc that includes Argentina and Brazil, the 9th largest economy in the world, is keen “to open right away a negotiation”, according to Brazil’s foreign minister, Jose Serra. Praising Britain’s new free-trading direction, Serra says Britain “has a more open economy and has a very important position in relation to investment in Brazil”. With the Real set to devalue later this year, Brazil’s desire to trade with Britain could even mean cheaper food, as beef exporters look set to swoop into newly deregulated agricultural import markets. So that’s the US, China, India, South America, Pakistan and South Korea who have signalled they want trade deals so far…