Brazil, on the other hand, is caught between the competing imperatives of maintaining complete control over the Amazon and expanding its trade relationships. The Amazon corridor, which traverses through northern Brazil, is both a vulnerable and strategic area for the country. It is sparsely populated and minimally developed, meaning the state presence there is quite limited. Brasilia is staunchly opposed to any foreign involvement in the management of the Amazon, fearing that foreign presence could overpower the Brazilian government’s control of the region and segment its national territory. So, while environmental concerns over the Amazon fires are significant, for Brazil, so too are national security concerns.
But Brazil has also made it a priority to develop strong and diversified trading relationships. It needs to stimulate economic activity to avoid a slowdown, and increased trade is a key pillar in these efforts. In particular, the country needs to expand beyond its top three trading partners (China, the U.S. and Argentina) whose own economic woes have made them less reliable. The Bolsonaro administration is working on multiple fronts to achieve this diversification. On Aug. 24, Mercosur and the European Free Trade Association (comprised of Switzerland, Liechtenstein, Norway and Iceland) announced they had reached a free trade agreement “in substance.” Mercosur is also in talks with Canada, South Korea and Singapore over trade, and Brazil has entered formal trade negotiations with the United States.
The EU-Mercosur free trade talks have been riddled with challenges, and even if the blocs today seem in a better position to make a deal, threats to an agreement persist. France and Brazil, in particular, will have to weigh the benefits of an agreement against other pressing national needs. It will be several more years before the deal comes into force. In the meantime, Paris and Brasilia will seize on issues like the Amazon fires to strengthen their own positions and to hedge their bets.
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