China shifts focus to Brazil following Uruguay’s Mercosur stalemate

Uruguay’s aim to negotiate a bilateral agreement with China has faltered, causing China to focus on Brazil and Argentina, the larger partners of the Mercosur regional bloc.

Political science analyst Nicolás Pose underscored Brazil’s reemergence as Mercosur’s significant player in a conversation with Sputnik.

After years of discussions with China and attempts to introduce more flexibility to Mercosur, Uruguay’s government, led by Luis Lacalle Pou, could not secure a Free Trade Agreement (FTA) with China.

The negotiation process, which started formally in 2022 following talks that began in 2021, has not shown substantial progress.

Uruguay’s Foreign Minister, Francisco Bustillo, acknowledged that progress towards a potential FTA with China would be contingent on Brazil’s position, given Beijing’s preference for bloc negotiations with Mercosur.

According to Pose, China’s decision not to proceed with Uruguay alone was foreseeable, despite the Uruguayan government’s bilateral negotiation efforts.

Pose suggested that the fate of the agreement largely relied on the approval of Mercosur’s largest members, especially Brazil.

This failed pursuit could leave Uruguay’s diplomatic agenda resentful and potentially lead to political consequences.

Uruguay’s earlier endeavors to establish an FTA with China date back to former President Tabaré Vázquez’s administration, which sought foreign market access and attempted to negotiate an FTA with China in 2016.

However, similar to the current situation, this effort was paused pending Brazil’s approval.

Years later, Lacalle Pou revived this goal, receiving support from Brazil’s President Jair Bolsonaro despite Argentina’s opposition.

Pose speculated that Luiz Inácio Lula da Silva’s return to the Brazilian government might have spurred China’s interest in bilateral negotiations with Uruguay.

Yet, he clarified that it remains uncertain if these negotiations were part of the dialogues between Lula’s government and China.

Pose emphasized that Uruguay was bound by Mercosur’s policy of negotiating tariff agreements with third countries collectively.

China, respecting this rule, privileges its political relationship with Mercosur’s larger partners.

Consequently, Brazil emerges as the regional system’s significant player due to its large population and gross domestic product.

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