Brazil’s New Farm Minister Warns Bolsonaro on Israel Embassy Move

(Bloomberg) -- Brazil’s incoming agriculture minister has a particularly delicate job -- to ease the impact of her boss’ foreign policy views on the country’s massive farm exports.

Tereza Cristina Dias, one of the few career politicians President-elect Jair Bolsonaro invited to join his cabinet, told Bloomberg News she is alerting the former Army captain to the risks of moving the country’s embassy in Israel to Jerusalem. That change would upset many clients in the Arab world, which has become a major market for Brazilian meat.

“I’ve explained the sector’s concern to the president, the stats of our exports, the impact these measures would have,” Dias said in an interview in her home in the capital Brasilia.
“He’s very sensitive, he’s not inflexible.”

Brazil’s New Farm Minister Warns Bolsonaro on Israel Embassy Move

Brazil ran a $7.1 billion surplus with the 22 nations of the Arab League in 2017, compared with a $419 million deficit with Israel. The league has urged Bolsonaro to rethink plans to follow in the footsteps of the U.S., which moved its embassy to Jerusalem from Tel Aviv in May.

A former paratrooper and long-time lower house representative, Bolsonaro was elected on Oct. 28 with a tough rhetoric against crime and pledges to downsize the government following years of corruption scandals and a deep economic recession.


China

“The big mission is to keep all current markets and start to open new ones,” Dias said.

Equally challenging for her will be how to deal with China. The single-largest client for Latin America’s commodity-heavy exports has been a frequent target of the president-elect, who once said he wouldn’t sell strategic assets to the Chinese because they’re “heartless.”

“He doesn’t have a prejudice against China,” Dias said about Bolsonaro. “China is a big market but we need to have a strategy for better trade.”

Part of that strategy, she said, is to reduce the dependency on China by diversifying exports to other countries in Asia, such as India, Indonesia and Malaysia.

Mercosur

Dealing with trading partners closer to home will be no less of a prickly affair. In line with Paulo Guedes, the future economy minister under Bolsonaro, Dias too says the South American customs union Mercosur is in need of a serious overhaul. Yet unlike the powerful University of Chicago-trained economist, Dias favors more not less intervention, calling for informal export quotas between member countries. She said Brazil has been swamped by rice, milk and apples from the bloc, harming domestic producers.

“The Mercosur model of free trade isn’t working for agriculture,” Dias said.

In addition, there’s a long list of issues that the Bolsonaro government has yet to agree upon before taking office on Jan. 1, she said. That includes the country’s position on the Paris climate accord, new rules on land ownership by foreigners, and a recent formula on freight rates, which farmers say increased production costs.

©2018 Bloomberg L.P.