Yara Aquino
Reporter - Agencia Brasil

Brasilia – The Federation of Industries of the State of São Paulo (FIESP), and the Federation of Industries of Rio de Janeiro (FIRJAN) issued a note this Friday (3) criticizing the safeguard agreement, called the Competition Safeguard Mechanism (MAC), signed by Brazil and Argentina on February 1st.

The Federations evaluate that the agreement conflicts with free trade concepts, creates an environment of insecurity for the bloc’s economic agents, and represents a backward step on the process of "building" the Mercosur.

In the note, they regret that the agreement did not include items such as a maximum one-year validity for the safeguard (instead of the agreed three years plus one), nor the immediate revocation of the mechanism if trade deviations occur. The Federations believe the agreement may bring severe consequences for Brazilian exports.

The safeguard mechanism had been proposed by Argentina in 2004. The country affirms it needs such a tool to protect its local industry from an "invasion" of Brazilian products.

Translation: Andréa Alves