BUENOS AIRES – Exports of the MERCOSUR bloc grew by 13.8% in 2017 amidst efforts to modernize the integration agreement, according to a report published by the Institute for the Integration of Latin America and the Caribbean (INTAL), part of the Integration and Trade Sector at the Inter-American Development Bank (IDB).
This is the first time that MERCOSUR’s external sales have gone up in five years.
Revitalizing Integration is an annual report that analyzes the main changes and developments in the bloc, which has recently set out to expand and update the agreement at its core.
In economic terms, the bloc’s members experienced average GDP growth of 2.8% in 2017. Developments in global trade played a part in improving the domestic macroeconomic outlook, prompting a 13.8% increase in total MERCOSUR exports over the year. Trade between MERCOSUR member countries grew by 16.4% in the first half of 2017, even faster than trade outside the zone.
Furthermore, the bloc’s integration agenda has moved forward following efforts to modernize the agreement. For the first time ever, the MERCOSUR now has an instrument to facilitate intrabloc investments and a government procurement regime. There has also been progress toward the removal of a major group of barriers to intrazone trade: 43 such obstacles have been identified and are being monitored. The bloc has also set out to develop a modern digital integration agenda and has reconfirmed the importance of the Structural Convergence Fund as an instrument for reducing asymmetries between member countries.
Alejandro Ramos, a senior specialist at INTAL, says that the current context might favor an intensification of the regional integration process for the MERCOSUR. “Current global uncertainty is allowing us to re-evaluate regional integration schemes like MERCOSUR and the Pacific Alliance. The goal is to fill in the missing links in regional integration to guarantee broader markets that function as a platform for technological innovation and strengthen export competitiveness.”
Ana Inés Basco, an integration specialist at INTAL, stresses how regional public opinion has begun to favor the deepening of integration processes, according to the results of the studies carried out by the INTAL/Latinobarómetro initiative . “Unlike in other parts of the world, people in Latin America perceive that there is a deficit in integration. Broad swathes of the population take a positive view of these processes.”
MERCOSUR has reopened several negotiating fronts with partners outside its borders, most notably with the Pacific Alliance, with the aim of establishing a Road Map that covers trade facilitation, rules of origin, the identification of regional value chains, trade promotion, SMEs, customs cooperation, nontariff barriers, and facilitation for trade in services.
The bloc has also stepped up its negotiations with the European Union and has begun talks with the European Free Trade Agreement (EFTA) and Canada. It is also seeking to improve its existing agreements (such as with India) and start negotiations with the Asia-Pacific, including the Republic of Korea, Japan, Australia, New Zealand, and ASEAN.
Through this publication, the Institute for the Integration of Latin America and the Caribbean (INTAL), which is part of the IDB’s Integration and Trade Sector, hopes to provide up-to-date information that will allow the general public to better understand the MERCOSUR’s development and prospects, which are a major asset for regional integration.
About the IDB
The IDB’s mission is to improve lives. Founded in 1959, the IDB is one of the leading sources of financing for economic, social, and institutional development in Latin America and the Caribbean. The IDB also undertakes cutting-edge research projects and provides consultancy services on policies, technical assistance, and training to public and private clients throughout the region.