By Lise Alves, Senior Contributing Reporter
SÃO PAULO, BRAZIL – The government of Brazil announced on Friday that Mercosur trade partners (Brazil, Argentina, Uruguay and Paraguay) were closer to reaching an agreement with the Pacific Alliance bloc, expanding trade in South America and conquering new markets.
“It is another step that we will take in the rescue of the original purposes of Mercosur with a view to making the bloc a platform for the competitive insertion of our countries into the international economy,” said Brazil’s Foreign Relations Minister, Aloysio Nunes in an open letter to local media last week.
The meeting between the four Mercosur and seven Pacific Alliance representatives took place in Buenos Aires, Argentina, during the World Economic Forum of Latin America.
According to Nunes, the Mercosur and the Pacific Alliance groups together account for eighty percent of the population of Latin America (470 million people) and the Caribbean, and more than ninety percent of the region’s GDP and foreign direct investment flows.
“The convergence between Mercosur and the Pacific Alliance could mean the birth of a new dynamic pole of the world economy. We want to take advantage of the network of agreements that already unite us to make a leap of quality. We have free trade agreements with all the South American countries of the Pacific Alliance. With Chile, we have already achieved full liberalization of trade and, with Peru and Colombia, we are very close to that,” added the Brazilian official.
“We are moving forward in integration, at a time when uncertainty reigns internationally, and there are protectionist, nationalist and even xenophobic pressures,” Chilean Foreign Minister Heraldo Muñoz said Friday during a news conference, referring to the United States’ decision to revise trade agreements and the recent surge of right-wing nationalist parties in Europe.
In the document released at the end of the meeting, the eight countries pledged to advance in certain areas before discussing tariff reductions. Both Mercosur and Pacific Alliance representatives agreed that the volume of trade between the eight countries is low compared to other regions and that there is enormous growth potential in the region.
“Intra-regional trade in the European Union reaches 69 percent, while in Asia it reaches 55 percent. Here in Latin America it is only 18 percent,” concluded Muñoz.