7 Queries for Mercosur, VI: How segmentation threatens integration?

Bolivia was accepted as Mercosur’s sixth full member in July 2015.
One year later, 25 years into its making, the bloc is seemingly divided into three segments.
Argentina and Brazil form the first segment, with center-to-right governments and relatively developed economies, but ravaged by recession.
Uruguay and Paraguay forms the second, both highly agricultural, waiting for industrialization.
Venezuela and Bolivia forms the third, with leftist governments and different ideology.

(Soundbite) Carlos Gonzales, Peruvian Economist
“It is dominated by the two largest economies of Latin America, Argentina and Brazil. Now the problem has some variations regarding each of them. The top two have more export potential. …On the other hand, Brazil has a problem of attracting investment. Both countries also have a common problem. They have lagged far behind in aspects of free trade agreements.”

When the focus pans further south, there is a different picture.

(Soundbite) Carlos Gonzales, Peruvian Economist
“Yes, definitely, Paraguay and Uruguay are purely agricultural countries in this case, therefore their figures present positive for them. Anyway, intensified competition in the markets has made it ever urgent for them to improve technology, innovation and productivity.”

For Venezuela and Bolivia, the situation is much more different.

(Soundbite) Ronnie Lins, Director of Center of China-Brazil Research and Business
“Mercosur used to have a more political than economic trait during the previous administrations (of Argentina and Brazil), and with other countries such as Bolivia and Venezuela. So Mercosur had more a political than an economic goal. That did not have a good outcome, because not all countries shared the opinions of those rulers.”

Currently suspended Brazilian President Dilma Rousseff once said that the priority for Mercosur was to seek greater economic integration. Though the commerce within the bloc has multiplied by 12 times since its foundation, the reality is yet fractured and somewhat disappointing.

(Soundbite) Carlos Gonzales, Peruvian Economist
“Yes, definitely, Mercosur needs to review its integration strategy. It has postponed certain opening commitments to be free to apply domestic policies of development. It is especially clear with Brazil. These internal policies have left the member countries as stragglers from the rest of the world in terms of competitiveness and integration.”

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