France-Brazil chamber urges swift ratification of Mercosur-EU trade deal

The United States’ adoption of tariffs against the rest of the world highlights the urgency of strengthening Brazil’s trade relations, and one key avenue is the ratification of the agreement between the European Union and Mercosur, says Thierry Besse, president of the France-Brazil Chamber of Commerce in São Paulo (CCIFB-SP).

“Everything that has been happening only makes it more evident and necessary to deepen the economic integration between the European Union and Mercosur,” said Besse, a Franco-Brazilian who also serves as institutional director at Vinci Concessions, an operator of airports and highways. The interview took place on July 30, just minutes after U.S. President Donald Trump signed the decision to impose 50% tariffs on Brazil—three days after the U.S. and EU reached a separate trade deal that set a 15% tariff for most European exports.

“We urgently need to move forward with the integration of these blocs and, in particular, with France-Brazil relations, because here we have predictability, trust, long-term vision, and partnership,” he said.

A strong advocate of the EU-Mercosur agreement, Besse emphasized that the pact would benefit both blocs and especially the trade relationship between France and Brazil. “We hope for a swift ratification, because time is passing and the need for this agreement is increasingly clear.”

CCIFB-SP is one of four regional branches of the France-Brazil Chamber of Commerce in the country. The São Paulo regional office accounts for over 70% of the 500 member companies. A large majority supports ratifying the EU-Mercosur agreement, Besse said.

The deal would create a market of over 750 million consumers—around 10% of the global population—and a combined GDP of approximately US$22 trillion, or about 20% of global output.

France, however, remains the main source of resistance—though this may shift, given growing dissatisfaction by French President Emmanuel Macron and other EU leaders over the recent U.S.-EU agreement.

“The world seems increasingly turbulent and unstable. In this challenging scenario for economic actors, it becomes clear that long-term partnerships and trusted relationships are more important than ever. And the Chamber is living proof of that—it just celebrated its 125th anniversary—which shows that the France-Brazil relationship is solid,” said Besse, without directly commenting on the U.S. decision.

“French investment in Brazil and the trade relationship develop, in a sense, independently of political cycles. French companies invest in Brazil with a long-term perspective, which is very healthy for the economic relationship between the two countries.”

According to Besse, all signs point to continued growth in this relationship. Despite Brazil’s economic volatility, French companies and investors have remained in the country. The Chamber estimates that there are 1,300 branches of French companies in Brazil, employing over 500,000 people and generating more than €61 billion (about R$390 billion) in revenue in 2024.

“That’s twice the revenue of Vale,” which reported R$206 billion in net revenue in 2024, “and nearly that of Petrobras,” which earned R$490.8 billion in the same year, “so it’s a very significant volume,” Besse noted.

He said the economic relationship between the two countries is in a positive phase, with Brazil consolidating its position as a “privileged” destination for French investment. “France is not focused on just one segment of the economy. French investment spans all sectors—from the aeronautics and defense industries, to retail, infrastructure, energy, and even luxury goods.”

According to Brazil’s Central Bank, France was the country’s third-largest foreign investor in 2023, with US$66.3 billion in stock, behind only Spain (US$66.7 billion) and the U.S. (US$272.8 billion). France is also the second-largest recipient of French investment among emerging markets, after China, according to CCIFB.

Among the sectors where French investment has been most active in Brazil, Besse highlighted the energy transition sector. French companies have been heavily involved in building and investing in solar power plants, especially in Brazil’s Northeast region—but not only there—and in wind power.

Besse believes that although French investment in Brazil has long been “very strong,” there is still room to grow, especially in trade flows. In 2024, bilateral trade between the two countries reached US$9.1 billion, an amount the CCIFB-SP considers still “modest.” President Luiz Inácio Lula da Silva has even called it “a shame” given the size of the two economies.

For Besse, the EU-Mercosur deal could boost trade flows, particularly for small and medium-sized enterprises (SMEs), which face greater difficulties accessing foreign markets. “There’s still a lot of potential for exports from French companies to Brazil—and vice versa,” he said.

Initially, he explained, the deal would facilitate exports by SMEs, particularly in the industrial sector, as it would gradually reduce tariffs between the blocs. Over time, it could also lead to local manufacturing, with new plants creating more jobs and income.

Source: Valor Econômico

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