Franca's footwear sector forecasts high exports, but expects guidelines in the pact between MERCOSUR and the European Union

The agreement signed between MERCOSUR and the European Union, which promises to zero tariffs of products marketed between the two blocks, was positively received by entrepreneurs from the footwear sector of Franca (SP), a city considered the national capital of the male shoe . But despite the expectation of growth in exports, the Footwear Industry Union (SINDIFRANCA) considers any premature evaluation, stating that the footwear has not yet been mentioned in the negotiations and in the guidelines already disclosed. When fully implemented, the agreement will zero the rates of 91% of the products that the European Union exports to Mercosur within 10 years. In the same period, rates of 92% of the items exported in the opposite direction will be withdrawn. Founder of Anatomic Gel, in the market for 23 years, Jacommits dedicates 45% of the daily production of 1500 pairs of footwear abroad. Only in Europe are 38 destinations. To meet the demand, the company inaugurated a distribution and logistics office in London. "For me, it's a very promising market. Currently, I have to pay ICMS [tax on circulation of goods and services] which revolves around 8% to 12%. With this agreement, the expectation is that this will no longer exist when the goods arrive in Europe, "he explains. Analyst of foreign trade of Sapatoterapia, Gustavo Figueiredo states that the exemption of tariffs should make Brazilian footwear more accessible and competitive compared to competitors, such as those produced in Portugal, for example. "As our products are better than theirs, we know that there are no obstacles to tariffs, customers will be programmed with the dates and will return to buy from Brazil. We made contact with several clients and evaluated very positively, "he says. With production ranging from 360,000 to 400,000 pairs per year, Sapatoterapia is intended for 50% of it for export. Altogether, there are 80 destinations throughout the Middle East, much of Asia, Latin America and punctual customers in the United States. Figueiredo says that the brand has already had distributors in European countries, but their number has declined because tariffs make products more viable and the business is unfeasible. With the agreement between MERCOSUR and the European Union, the trend is to recover the market. "We are making contact not only with these distributors, but with various customers. Our products will again become competitive, and we have no doubts that we have more design and quality to offer. Taking advantage of the moment of exchange, our prices will be much better, "he says. Caveat The European Union is the second largest trading partner in Mercosur. The negotiations between the two blocks moved US $90 billion in 2018. Therefore, the agreement represents 25% of the global gross domestic product (GDP), encompassing 750 million people. The text released in the last week, which is a preview of the pact guidelines, indicates the amount of meat and other agricultural products, such as sugar, ethanol, orange juice, fruits and cheeses, which will have tax benefits in import and export. The rate of footwear has not yet been mentioned and it is precisely this caveat made by the Union of Shoe Industry of Franca (Sindifranca). The President of the entity, José Carlos Brigagão do Couto, says it is early to assess the impact on the sector. Couto points out that Sindifranca's efforts are being directed, at this time, in actions to reverse the poor performance of production, the generation of jobs and the exports of the sector, as a consequence of the internal economic recession. Last Monday (1st), Couto and other leaders of the footwear sector met with Governor João Dória (PSDB), in São Paulo (SP), to discuss an innovation plan and the possibility of tax reduction, such as ICMS. "We don't have an industrial policy traced, much less to exports. We will try to work in this direction, unite with the state government to increase exports. Logically, this will depend on the reforms that the federal government needs to do, "he says. Investment The evaluation of the President of Sindifranca is the same as the Professor of international relations of the University of São Paulo (USP) and the Fundação Armando Álvares Penteado (FAAP) Vinícius Rodrigues Vieira, highlighting that the projections so far are mere speculations. "Everything is still preliminary because the agreement was finalised-as we speak in the language of international negotiations-at ministerial level and approved by the Presidents, by the executive. But there is still a very complex process of ratification ahead, "he says. Vieira explains that after the announcement of the agreement, it is up to the Congress or Assembly of each MERCOSUR country and the European Union to approve the items that compose the pact. Only after this phase, the measures will be effective, but applied gradually. Finally, Vieira states that producers and entrepreneurs need to articulate independently of economic agreements, investing in technology, improving production processes and identifying new markets, to have more competitiveness abroad. "What is the responsibility of the Brazilian producer, regardless of the government, is investing. With agreement, or without agreement, this is what will determine, in the long term, the possibility of having markets overseas, whether we are European producers, or in the face of Asian producers, "he concludes.