The expansion of trade negotiations beyond the agreement with the European Union is currently of interest to the left and the right of the South American bloc, believes an UnB professor. The Mercosur summit in Foz do Iguaçu, this Saturday (20/12), saw clear manifestations of disagreement between its two main leaders, Brazilian President, Luiz Inácio Lula das Silva, and his Argentine counterpart, Javier Milei, on the situation in Venezuela, besieged by the United States.
But the political differences between the members of the bloc go beyond this conflict. Among the four founding countries of Mercosur, two are today governed by the left (Brazil and Uruguay) and two by the right (Argentina and Paraguay).
Bolivia, which joined the bloc in 2024 and is in the process of adapting its internal regulations to the bloc’s rules, installed its new right-wing president, Rodrigo Paz, last November, after two decades of left-wing domination.
Even in this scenario, Mercosur tends to continue seeking new trade deals, as it is an agenda that interests both the right and the left of the bloc, Haroldo Ramanzini Júnior, professor at the Institute of International Relations at the University of Brasilia (UnB), tells DW.
“Despite the political differences between the leaders of certain Mercosur countries, there is a certain convergence in the prioritization of the bloc’s trade negotiations (…) The trade negotiations agenda is one of the few to generate a certain cohesion”, he affirms.
She believes that the possible collapse of the agreement with the European Union (EU) – the signature of which was scheduled for Saturday and has been postponed to January 12 – will have an impact on the credibility of the European bloc “not only in relation to Mercosur, but also in relation to other international partners”.
Mercosur signed a free trade agreement with Singapore in December 2023, after 12 years without new such treaties, and in September this year a free trade agreement with the EFTA countries (Iceland, Liechtenstein, Norway and Switzerland). Negotiations are underway with the United Arab Emirates, Canada and India.
In addition to external trade partnerships, Ramanzini stresses that it is “fundamental” that Mercosur also strives to expand intra-bloc trade and regional productive integration.
Today, intra-bloc trade between Mercosur countries represents 11% of the region’s total trade. In the European Union, this figure is 61%, and in the Association of Southeast Asian Nations (Asean), 21%, according to data presented by Itamaraty.
DW: How do you assess the postponement of the possible signing of the agreement with the EU, scheduled for this Saturday, and what would be the impact on Mercosur if the agreement definitively collapsed?
Haroldo Ramanzini Júnior: Considering the geopolitical importance of the agreement in the current context of global instability and the efforts made by the parties to conclude the negotiations, the postponement of the signing is not a good sign.
It should be noted that the difficulty in signing is on the EU side, despite Mercosur’s efforts to meet the demands of the European side. This situation could generate a certain reduction in political confidence, impacting the credibility of the European bloc, not only vis-à-vis Mercosur, but also vis-à-vis other international partners.
Whether or not the deal fails, I believe Mercosur will continue to seek to advance its trade agenda. The experience of negotiations with the EU in terms of building the negotiating position and the topics covered by the agreement will be useful for other negotiations in which Mercosur is involved.
Is there currently a political climate within Mercosur that allows progress on other fronts of market expansion?
Despite political differences among the leaders of some Mercosur countries, there is some convergence in prioritizing the bloc’s trade negotiations. This is an agenda linked to the need for geoeconomic diversification and the opening of new markets. In this trade program, it is important to remember that it is also possible to promote measures aimed at developing intra-Mercosur trade.
In the current context of political fragmentation, the trade negotiations agenda is one of the few to generate a certain cohesion within Mercosur. It is therefore important to continue to advance this agenda, so that national actors, in each country, obtain gains resulting from Mercosur’s action. Mercosur constitutes a fundamental asset for member countries and the region.
Mercosur is currently negotiating trade deals with the United Arab Emirates and Canada, as well as expanding an agreement with India. Initial dialogues are also taking place with Japan, Indonesia and Vietnam. Which of these elements would be the most promising?
Given all these different negotiation possibilities, and considering that some are already underway, it seems essential to prioritize them.
At the same time, the external negotiations program keeps Mercosur active and requires frequent dialogue between member countries. In the current regional context, this dialogue becomes even more important.
Furthermore, the further implementation of the agreements will also require significant coordination from Mercosur member countries. It is, however, essential that efforts to open new markets outside the region are accompanied by equivalent efforts to develop intra-bloc trade and regional productive integration.
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