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Brazil set to boost regional integration

Bnamericas Published: Thursday, January 19, 2023
Brazil set to boost regional integration

Brazil seeks to drive regional integration, with potential benefits for trade and bargaining power.

“Regional challenges involve the development of industry 4.0, respecting the environment. In all Latin American countries, there are opportunities that would be better and more beneficial with greater integration,” finance minister Fernando Haddad told a panel during the World Economic Forum in Davos (in photo).

Other panel participants were the presidents of Colombia, Gustavo Petro, Ecuador, Guillermo Lasso, Costa Rica, Rodrigo Chaves, and Dominican Republic vice president Raquel Pena.

President Luiz Inácio Lula da Silva has created expectations for more integration since he won the election in October.

"Lula has always been a defender of greater international integration of Brazil, and this plan for Mercosur is no different. In recent years, Mercosur, as a bloc, has gone through a long period of stagnation, but this is now being reversed," Welber Barral, founding partner of BMJ Consultores Associados and foreign trade secretary between 2007 and 2011, told BNamericas. 

According to Haddad, regional integration will require advances in trade agreements, infrastructure and even financial markets to increase competitive advantages, especially in clean energy.

Haddad said the region has great renewables potential and could become a clean energy powerhouse.

Officials recently mentioned a plan for a single currency used in certain trade operations among Mercosur members and considerations of Brazil financing a stretch of Argentina's Nestor Kirchner pipeline to pump gas from Vaca Muerta to Brazil.

"Energy integration is an important part of Brazil's efforts in the region, since the country wants to increase energy resources. There are agreements to bring gas from Bolivia, but the connection of Vaca Muerta with south Brazil will also be important," said Barral. 

Lula is planning to visit Argentina this month.

Integration could get a boost from another front. For the first time, the IDB is led by a Brazilian, former central bank president Ilan Goldfajn, who could make the lender a key provider of funds and help structure projects.

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