The Mercosur in the Bolsonaro era: what the block needs to survive

The Mercosur in the Bolsonaro era: what the block needs to survive

Source: Archive

Flexibilizing rules to allow individual negotiations of countries outside the group is one of the axes of the changes that foreign trade experts believe could be made; What does the agreement started three decades ago mean?

Winds of change for the Mercosur are blowing. The commercial block that emerged three decades ago is becoming anachronistic and needs a restoration: this does not mean that its death certificate is signed, much less, but that its members must meet to modify the mother treaty. This is what Paulo Guedes, the superminister of the president-elect of Brazil, Jair Bolsonaro, who said: "Mercosur is not a priority," said Paulo Guedes, more or less tactfully this week.

Specialists in foreign trade consulted by the NATION interpreted the expression of Guedes as a warning that the new Brazilian government considers that the new economy of the 21st century requires individual trade negotiations between countries and no longer the slow and heavy block structure that was adequate 30 years ago, when the world was different.

Félix Peña, director of the International Trade Institute of the ICBC Foundation, believes that it is clear that the circumstances have arisen so that the members feel to see how they can adapt the Mercosur to the new local, regional and world reality. "It was obvious that we had to wait for the results of the elections in Brazil to know who to talk to, but without doubt the bloc needs a redesign," he says.

But you do not have to tear your clothes for this need for change, because it is nothing more or nothing less than what happens in other blocks too. "There is a certain consensus in the world that the different integration processes must be periodically redesigned, and in a world that has changed radically, I think it's time to sit down and talk," says Peña.

Going the distance, this kind of outdated is what is being seen in the European Union (EU) with Brexit and what happens in North America with Nafta (North American Free Trade Agreement, according to its acronym in English ). And, according to the analysts consulted, all this is independent of what the president could have said in recent days.

For Marcelo Elizondo, a specialist in international business, this is what has been happening between the two main Mercosur countries. "Now, more fuel is added to the fire with the words of Bolsonaro, who says that the block is no longer a priority, but this does not mean that Brazil is going to leave or is going to propose to dissolve the bloc. what to see, "explains the specialist.

Now, what would be the main thing to modify in this supposed revision? This is something that Uruguay already claimed at the time: to be able to conclude individual agreements with other countries, something that today is expressly prohibited for Mercosur members. That which was already anticipated by the Uruguayans is now endorsed by Bolsonaro, who maintains that Brazil wants to go out into the world to sign bilateral agreements as a country, with autonomy and individuality.

Anyway, the resolution will not be quick, since the process of modifying the mother treaty can take a year and then the Parliament of each member country must endorse that decision. "We will have to collect opinions from different sectors to see what is changed, but what is most talked about is that Mercosur binds its members and prevents them from negotiating individually with other countries," says Peña.

East
aggiornamiento It would not hurt Argentina, because when the bloc was thought of 30 years ago, its economy and the Brazilian economy were more similar than they are today and, therefore, they were conceived as two closest partners. "In addition, it was the fashion model, in the style of the EU, what happens is that today globalization is so great that what is needed is to reach third markets, something that, on the other hand, technology encourages," he says. Elizondo

From the Secretariat of Foreign Trade of the Ministry of Production, they insist that much work is being done to optimize the functioning of Mercosur as a bloc. "We have already made joint progress in improving their integration and in other aspects, such as the elimination of double taxation in the export of services and the relaunching of negotiations such as that of the European Union." We also advance in the agreements, with EFTA [Asociación Europea de Libre Comercio, según sus siglas en inglés], Canada, South Korea and Singapore, among others, "says Marisa Bircher, Secretary of Foreign Trade.

Bircher says that we are working on an insertion that allows us to both boost and accelerate regional integration and increase the quality of this insertion and make it serve as a tool for transformation towards a developed and competitive economy. "The economic-trade agreements are instruments that help achieve this, strengthening both Argentina and Mercosur," stresses the official.

Elizondo's vision of agreements with other blocks is, however, less optimistic. "If the mother document of the block is reformed, I believe that Argentina will be closer to signing a treaty with South Korea or Canada than Mercosur will be to agree on an agreement with the EU," he estimates. .

Afterwards, there is not much more on the horizon of the talks with other blocs: only the negotiation with the EFTA, plus an agreement already signed with Egypt and another with Israel. And there is the ever-pending link between Mercosur and the Pacific Alliance, something still in the making.

Numbers that worry

It is clear that the bloc needs a "refresh", something that can be concluded after reviewing the evolution of intra-zone trade: this year, Argentina will export to Brazil between US $ 10,000 million and US $ 11,000 million, US $ 7,000 million less than Five years ago. That's not all: in the year 2000, 25% of total Argentine exports went to Brazil, but already in 2012 that figure fell to 21% and currently, it is even lower (16%).

Data from the Abeceb consultancy show that the total exports of the block are also declining, since while in 2013 they were US $ 424,479 million, in 2017 they barely reached US $ 324,644 million. Even so, according to the Ministry of Foreign Trade, it is still an interesting market, with more than 260 million people and representing 4% of the world GDP, which makes it the fifth largest economy in the world.

Always according to Abeceb, the main destinations for the exports of the block are China, the United States, Argentina, Brazil, India, Holland, Chile, Germany, Japan and Spain. While the main markets for Argentina, which in 2013 had external sales of US $ 75,963 and today have US $ 58,384 million, are Brazil, the United States, China, Chile, Vietnam, India, Spain, Algeria, the Netherlands and Canada.

A look at the history of the bloc, which was born with the Treaty of Asunción (March 1991), shows that it did not reach as much as one would have liked: it never solved a dispute resolution process, it did not create autonomous common institutions, it did not materialize productive integration and failed to maintain a common external tariff too high (15%). Even so, what Raúl Alfonsín, Tancredo Neves and José Sarney once dreamed of having a chance to survive: yes, they must have flexibility and change what is no longer useful.

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