The Southern Common Market (Mercosur) was created in 1991 by the Treaty of Asunción of Argentina, Brazil, Paraguay and Uruguay. The bloc is a historic achievement in the region and one of the fundamental milestones in the economic integration of Latin America in order to overcome the previous logic of rivalry between countries and to establish a dynamic of cooperation.
With nearly 300 million inhabitants and an area of almost 15 million square kilometers (50% larger than the European continent and almost as big as Russia), Mercosur is known for its enormous potential in natural resources and food. The block exports around 63% of the world’s soybeans and is the main exporter of beef, chicken, corn, coffee and iron and the eighth largest manufacturer of motor vehicles in the world. GDP reached $ 4.447 billion in 2019 (measured by purchasing power parity), making it the fifth largest economy in the world as a bloc.
Although the explicit goals of the creation of Mercosur were economic and commercial, the bloc plays an important role in consolidating democracy and resolving conflict. Peace is a necessary prerequisite for development and regional integration has historically been a key instrument for strengthening our region as a zone of peace and cooperation without war conflicts.
We began in 1991 to create a free trade area for our goods and services that should circulate freely, as well as a common overseas agenda that would allow us to manage trade with the rest of the world. This has resulted in strong growth in our mutual trade. At the same time, we have succeeded in promoting the exchange of products with added value between the four associated countries, thereby promoting non-traditional export activities and creating jobs with high added value (biofuels, chemicals and petrochemicals, plastics, pharmaceuticals, steel, automotive industry, etc.). Despite the fact that Mercosul is a traditional and recognized exporter of primary products, much of the trade between members of the bloc takes place through industrialized products, with an emphasis on, for example, automobile trade (almost 50% of world trade in Argentina and Brazil).
At the same time, we are working on harmonizing the technical regulations in such a way that they create safety for production and consumers without unnecessarily hindering trade. In the area of public health, coordination between our countries has always been important, especially in the current Covid-19 pandemic. In addition, our citizens can settle in another country of the bloc to work freely and easily, which is not common in the rest of the world.
In 2004, we launched the Mercosur Structural Convergence Fund, which provided more than $ 1 billion in non-repayable loans for infrastructure and productive development projects, among other things, helping us to make our economies more competitive in particular the less developed areas of the region.
On the other hand, since its inception, Mercosur has negotiated and signed trade agreements with most countries in the Latin America region, which now enable a free trade area that covers most of the countries in America. Latin. In addition, we have negotiated trade agreements with the European Union, EFTA, Israel, Egypt, India and the countries of southern Africa, among others. Mercosur is not a closed block for foreign trade, but a platform for our countries to project onto the rest of the world.
In addition, cooperation within Mercosur extends to numerous areas: culture, education, science and technology, building a common citizenship, coordinating social and economic policy, etc. The common areas of work in the block are diverse and have changed in line with changes in the international context and the needs of our countries.
Of course, all of these successes the bloc has achieved in its three decades of history do not mean that there are not a number of challenges ahead of us. In this way, we need to work on our strategic agenda to define common and coordinated strategies for productive development, expand our production capacity for goods and services, achieve economies of scale and specializations, and integrate more intelligently into global value chains and global investment chains.
At the same time, Mercosur plays a role on an international level. At the G20 as well as at the WTO, the FAO and other international bodies, the Union of our countries helps us to defend our positions on the global agenda. In an increasingly complex and fragmented world scenario, the coordination of positions made possible by Mercosur is becoming increasingly relevant.
The world is going through a reconfiguration of the structure of world power and a crisis in the international institutions that have guided us for the past 70 years. Given the challenges and uncertainties, let us have no doubt that the integration of our countries will continue to be the best way to move development forward
We believe that the purpose of integration is to make agreements, to respect the diversity of our countries and to be inspired by the political will to want to integrate. Mercosul promotes regionalism in solidarity in political, economic and social affairs because we know that it makes us stronger when we encounter difficulties together.
Mercosur has been the most important foreign policy instrument for our countries over the past 30 years. It is definitely a state policy that has been maintained by the various governments. In these 30 years we have made many agreements: the commitment to democracy as a basic requirement for the life of our peoples; Respect for human rights as an essential and indispensable value for coexistence; the recognition of our diversity; the coordination of our growth policy to integrate our production structures.
The world is going through a reconfiguration of the structure of world power and a crisis in the international institutions that have guided us for the past 70 years. Given the challenges and uncertainties created by this scenario, we have no doubt that the integration of our countries will continue to be the best way to advance development, preserve our sovereignty, promote the well-being of our peoples and us into the USA integrate world.