The Director General for Latin America and the Caribbean of the Chinese Ministry of Foreign Affairs, Cai Wei, reiterated on Monday (25) in Montevideo that Beijing, which has started negotiations on a free trade agreement with Uruguay, is open to “cooperation” with “Mercosur as a whole.”
In 2019, the Mercosur generated a nominal gross domestic product (GDP) of around US$4.6 trillion, placing the bloc as the 5th largest economy in the world. The bloc ranks high on the human development index.
“The Chinese side is open to cooperation both with Mercosur as a whole and with each member country,” said the head of an official Chinese delegation that met with members of Uruguayan President Luis Lacalle Pou’s cabinet, including Foreign Minister Francisco Bustillo and Economy Minister Azucena Arbeleche.
“China is a firm supporter of free trade” and is “ready to negotiate and sign free trade agreements with all interested countries,” Wei affirmed, according to the official translation of his press statement posted via video on the Uruguayan presidential website.
Uruguay began its quest for a free trade agreement with China after both countries conducted a feasibility study for such an agreement, which caused controversy in Mercosur, of which South America’s smallest Spanish-speaking country has been a member since 1991, along with Argentina, Brazil, and Paraguay.
Uruguay, which has been pushing for a relaxation of Mercosur’s decision for nearly two decades, decided to go it alone with China.
FTA WITH SINGAPORE
On Wednesday, July 20, Mercosur and Singapore, signed a Free Trade Agreement in Paraguay, which could increase the Gross Domestic Product (GDP, sum of goods and services produced) for Brazil by R$28.1 billion (US$5.1 billion) by 2041. The Ministry of Economy released the estimate.
Negotiated since 2018, the agreement with Singapore should increase Mercosur’s exports to the Asian country by US$500 million per year. In 2021, the economic bloc exported US$5.9 billion to the island and imported US$1.3 billion.
THE TRADE AGREEMENT WITH THE EU IS ON HOLD
Mercosur has also been negotiating a trade agreement with the European Union. The parties reached a political consensus on June 28, 2019, after 20 years of negotiations.
This agreement has triggered a wave of criticism in Europe, especially from the highly subsidized agricultural sector and environmentalists, mainly in France.
Furthermore, some countries, such as France and Germany, are now cautious and question Brazil’s commitment to the environment, especially regarding the Brazilian Amazon.
This reflects the old continent’s bad habit of believing it can dictate terms to other regions, especially ex-colonies. France, in particular, has not yet woken up from its long-gone dream of being the ‘Grande Nation’.
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