'Pix is not under any threat', says former WTO director about US report

Roberto Azevêdo headed the World Trade Organization (WTO) between 2013 and 2020
AFP
The announcement that the United States government may resume imposing tariffs on Brazilian products, which occurred in the last two days, triggered a political dispute between the two main pre-candidates for the Presidency of the Republic, President Luiz Inácio Lula da Silva (PT) and Senator Flávio Bolsonaro (PL-RJ), son of former president Jair Bolsonaro (PL).
Lula accuses Flávio of having asked for tariffs to be imposed on Brazil during a visit to Donald Trump, in the United States, last week. On the other side, Flávio Bolsonaro accuses the Brazilian government of failing to negotiate with the United States in a satisfactory manner.
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But although the measure, if implemented, could affect at least 20% of all products exported to the United States, part of the political clashes have been around one point: Pix.
Lula has been using the argument that the United States would be against Pix, a mechanism created by the Central Bank that allows instant and free financial transactions. Flávio, on the other hand, uses as an argument the fact that Pix was launched in 2020, during the government of Jair Bolsonaro.
The document released by the United States Trade Office (USTR) on Monday as a result of a commercial investigation made several mentions of Pix, classifies the mechanism as a "national champion" and says that it would represent a threat to the operations of North American companies operating in the media segment. payment.
Flávio Bolsonaro met with Trump at the White House on Tuesday (27/5).
REPRODUCTION/INSTAGRAM/@FLAVIOBOLSONARO via BBC
Amid political debate, the Brazilian diplomat, former director of the World Trade Organization (WTO) and consultant Roberto Azevêdo, minimizes the supposed threats suffered by Pix.
"Pix itself is not under any threat", he says Azevêdo in an interview with BBC News Brasil. According to him, the only significant question Americans have about Pix is the fact that it is operated by the Central Bank, which is, at the same time, the regulatory body for payment method companies that compete with Pix. Brazil", adds Azevêdo.
With more than 30 years of diplomacy, Azevêdo is considered by Brazilian and foreign colleagues as an expert in international negotiations. At the Ministry of Foreign Affairs (MRE), he commanded the department's Economic Department between 2005 and 2006.
Afterwards, he was appointed as Brazil's ambassador to the WTO. In 2013, he assumed the presidency of the body, as recommended by the Brazilian government. In 2017, he was re-elected to the position, but resigned in 2020 to assume the vice-presidency of PepsiCo.
In 2023, he left the position and today works as a consultant and member of councils in bodies such as the National Confederation of Industry (CNI) and the Federation of Industries of the State of São Paulo (Fiesp).
In the interview, Azevêdo says that Brazil must continue trying to negotiate to reduce the impacts of the tariffs that the US government may want to impose on Brazil.

In a cautious tone, Azevêdo says he believes that the governments of Brazil and the United States would not have effectively engaged in negotiations on the matter, but he avoided explaining what would have led the Brazilian government to do so.
He says, however, that the climate of electoral conflict must not affect the negotiation process. of war for strictly electoral purposes", he says.
Lula and Flávio Bolsonaro exchange accusations about the possibility of imposing tariffs on Brazilian products exported to the USA
Getty Images
Check out the main excerpts from the interview:
BBC News Brazil - What is the immediate impact of this announcement in relation to tariffs on the Brazilian economy?
Roberto Azevêdo - We are back to the situation we were in before the US Supreme Court overturned the tariffs in January this year. What is happening now is that those tariffs are being reintroduced at a lower level. Until January, tariffs were at a level of 40%. Now, they are being reintroduced at 25%. Before, it was exorbitant, but it is still very high.
BBC News Brasil - How harmful could these tariffs be for the Brazilian economy?
Azevêdo - They were already quite harmful and will continue to be so for several reasons. Not only by closing the American market, but by preventing the integration of certain segments of the Brazilian production chain into global value chains that pass through the United States. The United States is a market in which Brazil can sell products with high added value, unlike our exports to China, where we sell many commodities. In the United States, we sell machinery, equipment, finished and semi-manufactured products. It is a very special market and this market is gradually closing.
BBC News Brasil - The government claims that there was an ongoing negotiation, with a 30-day deadline that had not yet expired. Was there a breach of trust in the negotiation?
Azevêdo - This negotiation was happening in a very incipient manner. All the information I have is that there were one or two very superficial contacts. There were high-level contacts, between Jamiesson Greer (US Secretary of Commerce) and our Minister of Industry and Commerce (Márcio Elias Rosa). But it is very difficult to reach results that change the context of the decision that was proposed through negotiations at this stage of the negotiations. We needed to have something more advanced, something more tangible and that wasn't there. The proposal to adopt measures as formulated is not surprising.
BBC News Brasil - What is left for the Brazilian government to do to prevent these sanctions from actually being imposed?
Azevêdo - Above all, negotiate, which is what all other countries are doing. I see some people in Brazil talking about retaliation, about using the law of reciprocity. We can do it, but, frankly, no other country has done this to date. Only China. But we cannot compare China's firepower with Brazil's. China did this and managed to make the United States rethink a lot of what it had been doing. But China is a market that is fundamental for the United States. Brazil is not. Brazil will have no ability to make the United States review its strategies through retaliation or reciprocity measures. We have to be careful not to let the electoral discourse win the game and prevail over the concrete interests and commercial interests of the Brazilian economy [...] The important thing is to have a cool head, negotiate and seek to reduce the economic, commercial and social impact on Brazil in the best possible way and not create animosity and a climate of controversy or war for strictly electoral purposes.
BBC News Brasil - In your opinion, is this what President Lula has done?
Azevêdo - I am not the one who will judge what the impact is.

I'm just saying that it is necessary for us to be very aware of the fact that those who will pay the bill for this friction and this non-convergence will be Brazilian companies, Brazilian workers who are employed and who will, possibly, lose their jobs or have their salaries affected by this situation of conflict with the United States.
BBC News Brazil - President Lula has attributed this announcement to the political actions of senator and presidential candidate Flávio Bolsonaro. What is your assessment regarding this? What responsibility did he have in this?
Azevêdo - I think that when it comes to politics, politicians understand each other. There will be accusations from both sides. One side will say that the other does not want to negotiate. The other will say that the other side was the one who caused this. These accusations, for me, do not solve the problem and will not carry out measures and actions that could reduce the impact on our economy.
BBC News Brazil - Has Brazil negotiated well with the United States government or does the announcement of these tariffs show that it has not and that the government has failed to attempt negotiation?
Azevêdo - Negotiation depends on two sides. Both sides need to want to negotiate and I am not very sure that both sides have done what is necessary to effectively engage in a negotiation that would lead to a positive or mutually satisfactory outcome. The negotiations could have been carried out in a more assertive, more constructive, more innovative, more creative way. I don't think this has happened and it won't be now, in the final stretch, that we will be able to change this situation in a very significant way. Personally, I don't believe this will happen.
BBC News Brasil - But, ambassador, objectively, was there a failure on the part of the Brazilian government in this process? And if so, which one?
Azevêdo - I think the two governments did not demonstrate the necessary commitment to resolve this problem in a negotiated way.
BBC News Brasil - And why would the Brazilian government do this?
Azevêdo - Then you should ask the Brazilian government, not me.
BBC News Brasil - There is a dispute of narratives to know who was responsible for this. In your assessment, does Senator Flávio Bolsonaro have responsibility for this or is President Lula responsible for this?
Azevêdo - The person who has the most responsibility for this is President Trump. It was he who made the decision to adopt these measures to reindustrialize the United States, to bring investments into the United States, to raise resources and raise funds to make fiscal incentive programs that he has been adopting in other areas viable. It is a decision that not only affected Brazil, but also several other countries.
BBC News Brazil - The report that was released by the United States commercial office makes many mentions of Pix. Why is there such a big emphasis on the Pix tool?
Azevêdo - It doesn't have a different emphasis than the others. There are six themes they raise. The report has corruption, deforestation, ethanol, intellectual property, digital platforms. Pix is one of them. I don't see anything exceptional in their treatment of Pix. On the contrary, they claim that the problem with Pix is not Pix itself, but the way Pix is administered, because it is administered by the regulatory body itself, which is the Central Bank. The question is about the fact that it is the central body that imposes the rules on Pix's competitors, which are, for example, Visa, Mastercard, etc. In Brazil, there is a lot of fuss around Pix, but I don't think Pix will undergo any changes. They (the US) will not ask for any of this. What they would like is for Pix to be managed differently and the request may or may not be met by Brazil.
BBC News Brasil - In your assessment, does Pix suffer any type of threats?
Azevêdo - No, in my opinion, no. Pix itself does not suffer any threat.
BBC News Brasil - But what is the interest of these large companies in relation to Pix?
Azevêdo - Pix has increased the ability of Brazilian consumers to participate in national digital platforms.

We in e-commerce and various other forms of economic engagement. They themselves recognize this. What I frequently hear is the fact that Pix is operated by the Central Bank and the Central Bank is the regulatory agent. Therefore, it would be unfair to Pix's competitors if Pix is operated by the regulatory agent itself. That's the complaint I hear and that's what I understand is on the table.
BBC News Brasil - Has the Pix issue been used in a political way?
Azevêdo - I think everything is being explored in a political way, on one side or the other. It's inevitable. We are in an election year. Of course, these things will be explored from an electoral point of view. It would be absolutely unthinkable if they were not explored. What we cannot do is lose perspective of the real impact on the economy.
BBC News Brasil - Is there a possibility of the government appealing to the WTO, being against these tariffs and what is the WTO's capacity to resolve a dispute like this today?
Azevêdo - Both Brazil and other countries have already appealed to the WTO, but as we all know, the WTO's dispute settlement body is inoperative and, therefore, will not lead to any practical consequences. Taking the issue to the WTO always has the power to increase the visibility of the issue and question the legitimacy of these measures. But we cannot expect a legally effective result at the WTO. This will certainly not happen.
President of the Republic, Luiz Inácio Lula da Silva, during Press announcement about the inauguration of the Instituto Federal Goiano - Campus Catalão, in Catalão - GO
Ricardo Stuckert / PR

Source: G1

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