Mercosur was set up in 1991, now with Argentina, Brazil, Paraguay, Uruguay, Venezuela and Bolivia as its full members, and aligned with several associate and observer countries.
With the Argentine and Brazilian governments turned center-to-right in 2016, a delicate change has occurred to the largest economic integrity in South America.
(Soundbite) Rosendo Fraga, Argentine Political Analyst
“The visit of Brazilian Foreign Minister (Jose Serra) to Buenos Aires in May as a more important point was an agreement to converge and coordinate the foreign policies of the two countries at bilateral, regional and global levels. … If Argentina and Brazil coordinate their foreign policies, it creates a very important axis in the region because the two countries combined are two thirds of the GDP of South America.”
Prior to 2016, the first common market in the world formed all by emerging countries had been led by leftists, including former presidents Cristina Fernandez of Argentina and currently suspended Dilma Rousseff of Brazil.
In May, Reuters quoted a foreign ministry spokesman as saying that newly-installed President Mauricio Macri was moving to distance Argentina from Mercosur.
Meanwhile, Brazilian Foreign Minister Jose Serra told reporters in June that he wanted to see Brazil freed from the Mercosur rule, which bans members from signing bilateral trade deals unless all members agree.
(Soundbite) Ronnie Lins, Director of Center of China-Brazil Research and Business
“What will happen now is that certainly Brazil and Argentina, the largest countries in the area, will question several structures and rules of Mercosur. In the past, if every time a member would get into an agreement with a country outside the bloc, the other members had to approve it. That does not make a lot of sense, because there is a great size of disparity between the members even though they are in the same region.”
Macri’s election and a political change in Brazil, where pro-business centrist Michel Temer has taken over, signaled that some change might be destined for intra-regional trade.
Latin America analyst at the Washington-based Atlantic Council Jason Marczak told Reuters that “political winds have shifted in Mercosur.”
(Soundbite) Carlos Gonzales, Peruvian Economist
“So in that aspect both countries have a positive picture. The other area to be discussed is industry, where in fact Brazil has taken a step ahead of Argentina in its development. … Argentina in the political aspect has taken a step further with the election of Macri. Changes are expected in the focus of economic policies. Brazil is still embroiled in a much larger process, as allegations of corruption exist, not such a deep change in the policy as Argentina has already displayed.”
At the end of June, Argentine president, together with representatives of Brazil, Uruguay and Paraguay, attended the 9th summit of the Pacific Alliance in Chile, while Venezuela and Bolivia kept silent. Maybe this was the latest sign of the so-called shift of wind in Mercosur.