Brazilian steel association, IABr, has opposed a deal Mercosur made with the European Union, a media report from Reuters said.
The deal is yet to be ratified. The agreement was closed following two decades of negotiations. Mercosur is made up of Brazil, Argentina, Paraguay and Uruguay.
The EU labeled has labeled the agreement as a “political”, “ambitious, balanced and comprehensive trade agreement.”
Brazilian steel association IABr said the agreement brings no advantages for the local steel sector. The local steel industry operates at 66 percent its capacity.
IABr said the Brazilian steel would lose preference within the Mercosur. Mercosur would likely get European-made steel with components made outside Europe.
IABr said Brazil has to deal with its own problems first, including high taxes and a weak domestic infrastructure, which makes domestic steel more expensive.