The Southern Common Market (MERCOSUR for its Spanish initials) is a regional integration process, initially established by Argentina, Brazil, Paraguay and Uruguay, and subsequently joined by Venezuela and Bolivia – the latter still complying with the accession procedure.
Mercosur has signed agreements with nations and organizations.
The member countries are Argentia, Brazil, Paraguay, Uruguay, and Venezuela (suspended).
Associated members Bolivia, Chile, Colombia, Ecuador, Guyana, Peru, and Surinam.
The EU has an FTA with this trading bloc.
The EU is the biggest foreign investor in Mercosur with a stock of €365 billion, while Mercosur’s investment stock in the EU amounts to €52 billion in 2017. While the relationship is very substantial both exporters and potential investors face barriers in Mercosur markets.
Brazil, Uruguay and Venezuela have b0th advanced interests in digital currencies. Many other MERCOSUR countries have shown an interest in CBDCS eg Chile.
However, the region’s digital trade will not reach its potential without regional integration – creation of a market where companies and consumers can buy and sell goods and services online seamlessly, unh ampered by national borders. Indeed, most digital sales and purchases in Mercosur countries are still domestic; digital trade is still quite nascent in the region. This is where Mercosur governments can make a difference: create the right conditions for di gital companies and online sellers grow and scale their sales not just in their domestic markets, but in the broader intra – regional market. IDB
To some extent, a Mercosur-China FTA deal then rides on the following points:
- An ability to link into China’s Belt and Road Initiative and expand Mercosur’s export range;
- Brazil’s political relations with Washington as opposed to Beijing; and
- The likelihood of additional free trade potential with other EAEU prospective FTA.
“We now export double what we did five years ago … Brazilian producers and exporters must discuss a planning strategy for China to meet the growing demand,” said Dos Santos.
Beyond this collection of countries, Uruguay has also expressed a strong will to cooperate with China by becoming an entry point for the Asian giant. The country has identified several opportunities for cooperation and investment from China, including:
- A central railroad
- Electricity installation in the North
- A new fishing port.
There are today many FTAs such as NAFTA, AFTA, TTP, TTIP, COMESA, and MERCOSUR. Mercosur could be a significant trading bloc.