ercosur (Mercado Común del Sur/Mercado Comum do Sul/Ñemby Ñemuha), South America’s largest free trade bloc, recently concluded negotiations with the EU for a trade deal which would steeply reduce barriers between most South American countries and the EU, providing the deal is approved by national legislatures. If the deal is realized, it would mean a profound shift in our understanding of South American regional politics and may pave the way to political integration of the region like what the EU achieved in the 20th century.
Mercosur is a relatively new organization, founded in 1991 as a way to unify the markets of Uruguay, Paraguay, Brazil, and Argentina, and which now includes all South American states as associate or full members (except Venezuela, which had its membership suspended in 2016 for violations of democratic standards and trade manipulation). It has avoided becoming further entangled in the Venezuela crisis, unlike Unasur, which, though once the region’s preeminent coordinating bloc, has now been reduced to five members, as frustrations over inaction regarding Venezuela led the presidents of Colombia and Chile to create a competing bloc, Prosur. Prosur itself has had trouble garnering interest in the region, facing skepticism over its ability to offer a new approach.
Mercosur’s core membership, excluding the Andean Community (Peru, Colombia, Ecuador, and Bolivia), which holds associate status, now represent nearly 4.6 trillion dollars of GDP, which would make it the sixth largest economy in the world (where the EU is counted as a single economy). This market, with its growing middle-class of consumers, is highly attractive to investors in developed industrial economies like the U.S., EU, and, in recent years, China. However, the shape of the EU trade deal, which includes concessions from the EU on agricultural subsidies, demonstrate that this time around the South American states will be active agents where trade is concerned.
If one thing has been made clear by the Mercosur/EU trade deal, it is that the Roosevelt Corollary, which formed the basis of American interventions in numerous South American governments of the 20th century, has lost its sway in the region. The Roosevelt Corollary, created as an addition to the older Monroe Doctrine, was used to justify intervention and to warn off European colonial and business interests. The doctrine was, essentially, an attempt to keep Europe out of South America by extending American interests. But Mercosur is a challenge the doctrine cannot contend with. Europe isn’t entering South America; South America has gone to Europe.
A unified South American bloc would be a formidable player on the world stage, and there is some precedent for the emergence of such a bloc from a regional economic organization. The EU itself has its roots in the European Coal and Steel Community (ECSC), founded in 1951 in the wake of World War II. Like Mercosur, the ECSC was an economic arrangement between neighbors that eventually grew in scope to become the EU as it is today. Mercosur, along with the Andean Community, which it shares close ties to, has shown that economic pragmatism is a better unifying force for once mortal enemies like Argentina and Brazil than the ultimately failed idealism of Unasur.
A unified South American bloc would be a formidable player on the world stage, and there is some precedent for the emergence of such a bloc from a regional economic organization.
A unified South American bloc would be a formidable player on the world stage, and there is some precedent for the emergence of such a bloc from a regional economic organization.
However, integration is not an inevitability. Serious challenges still exist to the continued functioning of this emergent bloc. The authoritarian tendencies of Jair Bolsonaro, president of Brazil, have caused concerns in the EU and in other South American nations. China, which has made inroads into South America since the turn of the century and would likely prefer to conduct trade negotiations with individual nations, not a regional bloc, to better bring economic pressure to bear and extract favorable terms. The United States, likewise, would likely prefer to continue dealing in South America as it has for nearly two centuries, though the chaotic approach of the current administration to trade negotiations has made American priorities in this area unclear.
South America is increasingly a growth region, and individual nations such as Peru, Ecuador, and Uruguay have pioneered green economics which will only grow more important as global warming continues. Mercosur’s entrance onto the world stage highlights the growing importance of regional blocs in tackling international issues, even as the U.S. has increasingly withdrawn from global commitments. It remains to be seen whether Mercosur will realize its potential as a unifying force for South America, and whether it will complete the process of integration with the Andean Community, but these negotiations with the EU make one thing clear: American hegemony in the region has been all but replaced by new regional consciousness.
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Will Mercosur be the Next EU?
Mercosur, South America’s largest free trade bloc, recently concluded negotiations with the EU for a trade deal which would steeply reduce barriers between most South American countries and the EU, providing the deal is approved by national legislatures. If the deal is realized, it would mean a profound shift in our understanding of South American regional politics and may pave the way to political integration of the region like what the EU achieved in the 20th century.
August 12, 2019
M
ercosur (Mercado Común del Sur/Mercado Comum do Sul/Ñemby Ñemuha), South America’s largest free trade bloc, recently concluded negotiations with the EU for a trade deal which would steeply reduce barriers between most South American countries and the EU, providing the deal is approved by national legislatures. If the deal is realized, it would mean a profound shift in our understanding of South American regional politics and may pave the way to political integration of the region like what the EU achieved in the 20th century.
Mercosur is a relatively new organization, founded in 1991 as a way to unify the markets of Uruguay, Paraguay, Brazil, and Argentina, and which now includes all South American states as associate or full members (except Venezuela, which had its membership suspended in 2016 for violations of democratic standards and trade manipulation). It has avoided becoming further entangled in the Venezuela crisis, unlike Unasur, which, though once the region’s preeminent coordinating bloc, has now been reduced to five members, as frustrations over inaction regarding Venezuela led the presidents of Colombia and Chile to create a competing bloc, Prosur. Prosur itself has had trouble garnering interest in the region, facing skepticism over its ability to offer a new approach.
Mercosur’s core membership, excluding the Andean Community (Peru, Colombia, Ecuador, and Bolivia), which holds associate status, now represent nearly 4.6 trillion dollars of GDP, which would make it the sixth largest economy in the world (where the EU is counted as a single economy). This market, with its growing middle-class of consumers, is highly attractive to investors in developed industrial economies like the U.S., EU, and, in recent years, China. However, the shape of the EU trade deal, which includes concessions from the EU on agricultural subsidies, demonstrate that this time around the South American states will be active agents where trade is concerned.
If one thing has been made clear by the Mercosur/EU trade deal, it is that the Roosevelt Corollary, which formed the basis of American interventions in numerous South American governments of the 20th century, has lost its sway in the region. The Roosevelt Corollary, created as an addition to the older Monroe Doctrine, was used to justify intervention and to warn off European colonial and business interests. The doctrine was, essentially, an attempt to keep Europe out of South America by extending American interests. But Mercosur is a challenge the doctrine cannot contend with. Europe isn’t entering South America; South America has gone to Europe.
A unified South American bloc would be a formidable player on the world stage, and there is some precedent for the emergence of such a bloc from a regional economic organization. The EU itself has its roots in the European Coal and Steel Community (ECSC), founded in 1951 in the wake of World War II. Like Mercosur, the ECSC was an economic arrangement between neighbors that eventually grew in scope to become the EU as it is today. Mercosur, along with the Andean Community, which it shares close ties to, has shown that economic pragmatism is a better unifying force for once mortal enemies like Argentina and Brazil than the ultimately failed idealism of Unasur.
A unified South American bloc would be a formidable player on the world stage, and there is some precedent for the emergence of such a bloc from a regional economic organization.
A unified South American bloc would be a formidable player on the world stage, and there is some precedent for the emergence of such a bloc from a regional economic organization.
However, integration is not an inevitability. Serious challenges still exist to the continued functioning of this emergent bloc. The authoritarian tendencies of Jair Bolsonaro, president of Brazil, have caused concerns in the EU and in other South American nations. China, which has made inroads into South America since the turn of the century and would likely prefer to conduct trade negotiations with individual nations, not a regional bloc, to better bring economic pressure to bear and extract favorable terms. The United States, likewise, would likely prefer to continue dealing in South America as it has for nearly two centuries, though the chaotic approach of the current administration to trade negotiations has made American priorities in this area unclear.
South America is increasingly a growth region, and individual nations such as Peru, Ecuador, and Uruguay have pioneered green economics which will only grow more important as global warming continues. Mercosur’s entrance onto the world stage highlights the growing importance of regional blocs in tackling international issues, even as the U.S. has increasingly withdrawn from global commitments. It remains to be seen whether Mercosur will realize its potential as a unifying force for South America, and whether it will complete the process of integration with the Andean Community, but these negotiations with the EU make one thing clear: American hegemony in the region has been all but replaced by new regional consciousness.
