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30 years of Mercosur and its potential 

   The Southern Common Market turned 30 years old in 2021, and during these three decades several economic and political benefits were generated for the five countries that make up the bloc: Argentina, Brazil, Paraguay,  Uruguay and Venezuela, which joined the bloc in 2012 but is suspended for violating the bloc's rules. In general, the bloc is an instrument used by member countries to promote cooperation, development, peace and stability in South America. In other words, the Treaty of Asunción – which created the bloc –  it established a model of integration between countries with the logic of a common market, that is, free circulation of goods, services, people, information and merchandise.  

The magnitude of trade within Mercosur

    The five member countries of Mercosur, together, occupy about 72% of the total extension of South America, an area three times larger than that of the European Union. The total population reaches 288.5 million, also about 70% of the total South American people, and the GDP is US$ 2.79 trillion, 76% of the total US$ 3.66 trillion in South America. Whole south. In general,  the block, in real data, represents the 5th largest economy in the world. In the region, there are also other countries that participate in the bloc, but as associates, they are: Chile, Bolivia, Ecuador, Colombia, Guyana, Peru and Suriname. For these countries, there is no Common External Tariff (CET), used by member countries, that is, there is no common tariff for commercial transactions.  

    Exchanges within the bloc have multiplied sevenfold since its creation, going from US$ 4.5 billion in 1991 to US$ 33.5 billion in 2019, taking into account only the trade between the founding partners. Furthermore, according to the website of the Ministry of Foreign Affairs of Brazil, MERCOSUR is the main recipient of foreign investment in the region. According to the latest data available at UNCTAD, Mercosur received, in 2019, 45.3% of foreign direct investment in Latin America and the Caribbean and 67.3% of foreign direct investment in South America. as a destination for foreign investment in the world: in the pre-crisis years (2005-2007), Mercosur received 2% of world investment; in 2015, it received 4.4%; and, in 2019, 4.8%. The expansion of the economic integration agenda has also contributed to attracting and boosting direct investment between the bloc's countries.

The modernization of Mercosur

   Recently, also according to the website of the Ministry of Foreign Affairs of Brazil, Mercosur has been undergoing a process of modernization, with the aim of giving greater dynamism to the negotiation of trade agreements with third parties and also to economic exchanges between countries. With this process, the intention is to achieve greater openness and integration with the world, and also to produce concrete effects in the lives of South American citizens. In addition, there is the objective of obtaining more markets for exports and access to imports with high technological content and at reduced costs, which serve as a potential for national producers and exporters.

The importance of assistance from an international consultancy

   In view of this process that the Southern Common Market is going through, preparation and a study are extremely necessary so that entrepreneurs, producers and exporters in general can have greater security and assertiveness in their investments. Prisma's services, for example, can meet this need and help your company to internationalize safely.

By Guilherme Gomes on 09/29/2021

Sources:

https://bit.ly/2Y3BTJ1

https://bit.ly/3CVIMKV

https://bit.ly/3CVICDj

https://bit.ly/3F5aKGc