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MERCOSUR: Organizational changes and benefits for relations with Brazil

What is MERCOSUR?

          O Mercosul se trata de an economic bloc, composed of Latin American countries, created in 1991 through the signing of the Treaty of Asunción. The bloc's purpose is to ensure the approximation of diplomatic and economic relations between the countries of South America, through free trade and a common external tariff for member countries.

 

Changes in MERCOSUR

          O Mercosul, rotineiramente, holds meetings and also, periodically, takes the country to the forefront of the customs bloc. Currently, Uruguay is at the forefront of the Bloc's presidency, as approved at the 60th summit held.

          Outras decisões importantes tomadas nessa summit, involve the reduction to 10% of the Common External Tariff, in an attempt to align with the member countries the tariff that Brazil adopted in 2019 unilaterally. This, according to the Federal Government, had the positive impact of Brazil exporting R$9 billion to member countries of the bloc and R$10 billion to Mercosur. This, with the focus of exports being on products related to equipment e  the automotive area.

 

Agreements with countries outside the bloc

          O Bloco vem realizando negociações with countries outside the Southern Cone, envisioning greater integration and ease of commercialization. Recently, an agreement was closed with Singapore, which should be signed by the end of 2022, which could facilitate the entry of South American countries into Southeast Asia. The Brazilian Ministry of Economy has a projection that by 2041, exports will add R$28.1 billion to the Brazilian GDP, evidencing a significant increase.

          Além de Singapura, também approximations are taking place with another country on the Asian continent: China. The proposal is for the agreement to be similar to the one made with Singapore, however, it encounters resistance from Paraguay due to its relationship with Taiwan - China's historic enemy. However, it is worth mentioning that the country under discussion is the biggest supplier of the Bloc's products, according to official data.

 

Trade relations with Brazil

          Como fica evidente, as changes in the Customs Union benefit Brazil's trade relations with other countries and, consequently, also benefit Brazilian investors. The Ministry of Economy's projections for GDP in the coming years prove this.

          Dessa maneira, para uma guidance on how to enter and take advantage of the economic changes resulting from the new situation in Mercosur, hire Prisma Consultoria Internacional, which, through a Market Analysis, can, with greater security and assertiveness, help a client to enter the international scenario.

By: Beatriz Fonseca on 08/18/2022

Sources:

https://bit.ly/3PAsBZE

https://bit.ly/3QVlHzi

https://bit.ly/3AaApeG

https://bit.ly/3AqTh9N