On Wednesday (May 6), Durigan participated in the program “Bom Dia, Ministro,” produced by Empresa Brasil de Comunicação (EBC).
“The world has moved forward. People are more productive, and there have been gains in digital technology and communication. We must recognize this and not pass the burden on to the public,” the minister argued, reaffirming the government’s commitment to defending workers’ interests and ensuring that the reduction in working hours is not accompanied by wage cuts.
“We will make sure to include protection against wage cuts in any measure approved by Congress. There will be no wage cuts,” said the minister.
He noted that three in every ten Brazilian workers work a six-day week and that most earn up to two minimum wages.
“We’re talking about 80 percent of workers who earn up to two minimum wages. These are the lowest-income workers. Those with higher incomes are already working more reasonable schedules. The idea is to recognize productivity gains and help us transition from a situation in which workers have one day off to one in which they have two days off,” he argued.
During the meeting, they discussed the next steps for the trade agreement between Mercosur and the European Union, which entered into force on a provisional basis last week, creating one of the world’s largest free trade areas and significantly reducing tariffs on Brazilian exports to Europe.
The treaty’s implementation, however, is provisional by decision of the European Commission. In January, the European Parliament referred the text to the Court of Justice of the European Union for review, which will assess its compatibility with the bloc’s legal framework. The process could take up to two years.
“We hope that the Court of Justice’s decision and the subsequent approval or ratification by the European Parliament will be positive. I am confident that they will be,” stated Portuguese MEP Hélder Sousa Silva, chair of the European Parliament’s Delegation for Relations with Brazil.
In practice, tariff reductions lower the final price of products and increase competitiveness against international rivals. In total, more than 5,000 Brazilian products will already be subject to zero tariffs in this initial phase, including industrial goods, food products, and raw materials.
Among the nearly 3,000 products subject to zero tariffs from the outset, about 93 percent are industrial goods. This suggests that Brazilian industry is likely to be the main beneficiary in the short term.
During the meeting, Geraldo Alckmin said that the agreement with the European Union was drafted with balance in mind and includes safeguards for productive sectors.
“Multilateralism is important and benefits society, which gains access to higher-quality products at more affordable prices while also stimulating competitiveness. The agreement was very well drafted and includes safeguards. It’s a win-win,” he noted.
Last week, Brazil established so-called tariff quotas, which are maximum quantities of certain goods that can be imported or exported with reduced or even zero tariffs.
According to the Brazilian government, the quotas cover about 4 percent of total Brazilian exports and only 0.3 percent of imports.
In practice, these percentages indicate that most trade between Mercosur and the European Union will take place without quantity limits and with reduced or fully eliminated tariffs.
The trade agreement between Mercosur and the European Union involves 31 countries, with a consumer base of 720 million people and a combined gross domestic product (GDP) of over USD 22 trillion.
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