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Protectionism is short-term and we don't like that, Brazil's finance chief says

  • Brazil is instead looking to boost its trade ties across the world, Eduardo Guardia told CNBC.
  • "Brazil wants to become a more open economy," he said.
  • An election later this year will bring volatility, Guardia said.

Even if protectionism brings some short-term gains, Brazil is against it and is instead looking to boost its trade ties across the world, the country's finance minister told CNBC on Thursday.

"Although we could even benefit from one specific situation what we, for us, for an economy like Brazil, who wants to have more commercial relationship(s) with the rest of the world, protectionism is not something that we like," Eduardo Guardia, told CNBC's Joumanna Bercetche.

Speaking at the World Bank/International Monetary Fund Spring Meetings 2018 conference in Washington, he added: "Brazil wants to become a more open economy so we have to export more and import more, we have to increase our chain of commerce with the rest of the world, so for us, we think having obstacles or barriers for having free trade is not the best way."

At a time of rising tensions in global trade, Brazil is confident that free trade is the best path to economic growth despite potentially benefiting from the recently imposed U.S. tariffs on Chinese products.

This is because after the U.S. imposed about $60 billion in tariffs against China, the latter threatened to raise duties on U.S. soya beans. Given that Brazil is a key exporter of soya beans, it could see its exports to China increasing.

Andre Coelho | Bloomberg | Getty Images

Brazilian election will bring volatility

Brazil will elect a new government in October, at a time when several scandals have affected the image of many politicians. One of the main contenders, Lula da Silva, is currently in jail on corruption charges, although he denies any wrongdoing.

Guardia told CNBC that the vote will bring some uncertainty, but the country remains committed to reforming its economy.

"This (election) can bring more volatility to the markets but my message is that Brazil is very well prepared to deal with this scenario," he said. "We have strong international reserves, inflation under control and we are moving in the right direction with the right policies."