Mercosur Trade Agreement Pros and Cons

In short, beyond the very possible conclusion of this agreement, the complexity of reaching an agreement between such different members with a positive outcome for all parties remains a difficult task. When an agreement is reached in the coming days, we will have learned the hard way that these balances are possible, even if it takes almost a quarter of a century to achieve them. However, this story will not end with the conclusion of the trial. It must be ratified by the European Parliament and all the legislative bodies of the Mercosur countries. And that`s where the real challenge could come. [2] However, the creation of an effective common market on the model of the integration of the European Union is far from being a reality for the current regionalism of Mercosur. On the South American side, the negotiation process has been communicated in advance to stakeholders and industry sectors, but the political debate on this issue remains weak. There is no political consensus among the Mercosur countries on the benefits of this agreement for the region, which could lead to potential risks and mistakes in the future. If the deal is reached quickly, the rush for negotiations may seem motivated by politics and political timing, or by efforts to counter strong protectionist tendencies around the world, rather than economic benefits. If each party does not reach a national consensus, there is a risk that the agreement, even if concluded, will not be ratified by each country`s legislature. As a result, FTAA negotiations were halted in November 2004, but the United States and six countries signed the Central American-Dominican Republic Free Trade Agreement in August 2004. These countries included Honduras, El Salvador, Guatemala, Nicaragua, Costa Rica and the Dominican Republic. DCFTA-DR increased total merchandise trade by 71%, or $60 billion, in 2013.

Carranza, Mario E. (2004) “Mercosur and the Endgame of the ftaa Negotiations: Challenges and Perspectives after the Argentine Crisis” Third World Quarterly. 25 (2), 319-337. Applying these arguments to South American regionalism, it is easy to see the problems arising from the disadvantages pointed out by Pedersen. In fact, it is difficult to imagine, for example, that Brazil and Venezuela, which have the same political leaning (left), will one day agree on certain aspects of foreign policy (for example, on relations with the universal hegemon, i.e. the United States, and the acceleration of the process of the American Free Trade Area – FTAA[4] –). Another aspect that has been a priority for critics of the relative failure of the Mercosur member states applies to Brazil in terms of deepening the integration process. It is true that the natural/hegemonic leader of the region necessarily entails costs and flexibility in the key features of regional trade agreements (e.g. B, the common external tariff), a price that Brazil has so far been reluctant to pay. Nevertheless, Venezuela`s membership in the bloc and its different initiatives and relations with other countries will change this scenario. The official position of Brazilian foreign policy is that emerging economies are more vulnerable to external influences than developed countries. Indeed, Brazil and Venezuela have begun, but not openly, to fight for the legitimate leadership of Mercosur and other groups.

The most recent example of this leadership race in regional policy is the creation of the Union of South American Nations (UNASUR) and the recent crisis triggered by Venezuela`s turbulent entry into the bloc, where these countries have developed mechanisms for understanding and consensus-building on issues that are difficult to achieve. such as energy problems. These external factors, which influence the domestic/regional policies of South American countries, have a direct impact on regional integration decisions, which are usually long-term policies. The Free Trade Area of the Americas is a planned free trade agreement between the United States and 34 countries in North, Central and South America and the Caribbean. The exception is Cuba. Although countries have been working on it for a decade, it has never been completed. Following the signing of NAFTA, the United States hosted the Summit of the Americas in Miami in December 1994. At the time, most countries in North and South America wanted an agreement that would help the region compete with the EU. The EU`s trade agreement with the Mercosur countries (Argentina, Brazil, Paraguay and Uruguay) will bring the Netherlands modest economic growth of €287 million (0.03% of GNP) if the agreement is fully implemented in 2035.

Some sectors, such as the machinery and transport sector and the pharmaceutical industry, will experience growth, but there will be negative consequences for the beef cattle and veal industry. A final aspect concerning the current role of regionalism, its hegemonic projects and their dynamics in terms of consensus-building is Burges` concept of “consensual hegemony” (Burges, 2008). Burges suggested that it is possible to expand hegemonic power without necessarily resorting to forms of government, and that Petersen`s cooperative hegemony could eventually become a consensual hegemony in light of Gramscian thought. But as we have already mentioned, Brazil has not expanded its economic and political capacities to influence decision-making related to regional integration, and therefore has not abstained from the “will” that Keohane and Nye set as a precondition for hegemonic projects (Joseph, 2008). In fact, Burges notes that the system of alliances[6] built by Brazilian foreign policy, unlike those formulated by Chávez of Venezuela, has tended to create consensus among South American countries since the end of the Cold War. The concept of hegemony put forward by Burges first suggests that Brazilian actions and interests in regionalism extend to the region. And secondly, that Brazil has helped to form the basis for a better position for the entire region in relation to the developed world. Thus, he argues that the non-compulsive aspect of consensual hegemony “can be created without domination” (Burges, 2008:81). Nevertheless, this voluntary or involuntary hegemonic power that Brazil exercises vis-à-vis the region presupposes a certain degree of legitimacy, supported by other States (in this case the Mercosur member States), with the consent of the internal layers occupying the current hegemonic positions. Research by Oliveira and Onuki (2000) shows how southern elites viewed Brazil as a Mercosur leader.

As they have observed, more than 60% of the elites of Mercosur member states believe that Brazil defends the interests of the entire group (Oliveira and Onuki, 2000:14). International relations are constantly evolving (Cox, 2007) and regionalism is no exception. Starting with the unprecedented rise in the creation and deepening of regional organisations in the 1990s, regional integration has had the most significant impact since then on the European Union and, more recently, on the crisis of the Common Market of the South (Mercosur). So what does the formation of Mercosur mean for the reconfiguration of socio-economic and political influence, both locally and globally, in terms of hegemony? This is the question we must bear in mind with regard to the role of regionalism, particularly Mercosur in South America. Nevertheless, the main objective of this article is to examine the crisis that affects the concept of regionalism today. Considering that our goal is to see if there is a new role for regionalism in South America (Mercosur) that involves the role of the United States as a superpower (hegemon) in the region, we will try to find out where Mercosur best fits in this classification (regional or great power). We will also highlight its main characteristics that will allow a better understanding of its national sphere of influence and its projection into the regional and international system. If negotiations on the proposed agreement between the two trading blocs are successful, they could. The EU-Mercosur trade deal is now one of the longest-running negotiations between two of the world`s largest customs unions. An agreement between the two blocs would not only be important in terms of trade and geopolitical weight, but a signed and ratified agreement would also end some of the longest trade negotiations in history. After starting in the mid-1990s with a hiatus in 2004 due to a disagreement over goods and services, negotiations dragged on for more than a quarter of a century. Meanwhile, the EU has adopted trade agreements with Chile and Mexico and pursued others.