7 Queries for Mercosur, IV: Why China matters a lot?

Uruguay expected to promote the signing of a free trade agreement between Mercosur and China when Uruguay held its pro-tempore presidency during the first half of 2016, Uruguayan Foreign Minister Rodolfo Nin Novoa said in March.

(Soundbite) Rosendo Fraga, Argentine Political Analyst
“I think there has always been a relationship between Mercosur and China. Every country in the bloc focuses on its ties with China bilaterally. The region now enters a time of economic hardship. … This region grows less. This will surely mean a shrinking South America to China as a market. But it is also true that China has a long-term vision, beyond one, two or three years.”

The China-Mercosur trade has grown rapidly in recent years. A case in point was Uruguay, whose bilateral trade with China rose from 1.848 billion U.S. dollars in 2010 to 5.09 billion in 2014.

(Soundbite) Ronnie Lins, Director of Center of China-Brazil Research and Business
“China has already consolidated its presence in South America. It is Brazil’s biggest economic partner, and Brazil is the largest powerhouse in South America. Argentina also has a lot of power. In strategic and geopolitical terms, China has already achieved much importance here. China is already here. What we need to do now, in this new situation of Mercosur, is to see how China can help Mercosur and what Mercosur can trade with China.”

(Soundbite) Miguel Rodriguez, Legal and Diplomatic Expert of Peru
“Mercosur needs technology. Technology is fundamental for development. Regional countries and Mercosur countries have raw materials. We should consolidate a main view with China of switching from commodity exchange only for economic gains. I think that the ultimate aim should be to prop up China to create a process of technology transfer and aiding our industrialization.”

China is Mercosur’s second largest trade partner and export destination, while production capacity cooperation has been jumpstarted to help its Latin friends gain more momentum.

(Soundbite) Ronnie Lins, Director of Center of China-Brazil Research and Business
“There are several areas, but I would highlight the infrastructure sector, which is very deficient both in Brazil and South America. China has great expertise in this area. This is essential because it will not only improve urban mobility, but also logistics and productivity of exports, which are all we want. If I had to choose one item to initiate this new relationship, based on economic aspects, I would choose infrastructure.”

(Soundbite) Miguel Rodriguez, Legal and Diplomatic Expert of Peru
“Almost always, economies like ours, which are developing economies, as other countries have achieved a high level of technological development, tend to be impacted positively. Obviously, the Mercosur countries, with their current mechanisms successful and important, want to have a much more attractive look and a much closer look for recreating more mechanisms like free trade agreements with China.”

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