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An integration for the future

“The convergence between Mercosur and the Pacific Alliance may signify the birth of a new dynamic pole in the world economy.”
Aloysio Nunes Ferreira

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Today (April 7) I will represent Brazil, along with my colleague Marcos Pereira, Minister of Industry, Foreign Trade and Services, at the ministerial meeting of the founding members of Mercosur (Brazil, Argentina, Uruguay and Paraguay) and the member countries the Pacific Alliance (Chile, Colombia, Peru and Mexico). The meeting will take place here in Buenos Aires, and has been organized by the Argentinian Government, which occupies the Pro Tempore Presidency of Mercosur.

This is a new step that we are taking in rescue of Mercosur’s original purposes, in order to transform the bloc into a platform for the competitive insertion of our countries into the international economy.

One way to achieve this goal is establishing trade agreements with other countries or blocs. Together, Mercosur and the Pacific Alliance account for 80 percent of the population of Latin America and the Caribbean and for more than 90 percent of its GDP and foreign direct investment flows. We are talking here about a market of almost 470 million people.

The convergence between Mercosur and the Pacific Alliance may signify the birth of a new dynamic pole in the world economy. We want to take advantage of the network of agreements that already unite us to achieve a qualitative leap. We have already free trade agreements with the South American countries that integrate the Pacific Alliance. With Chile, we have achieved full trade liberalization and with Peru and Colombia we are very close to achieving the same In 2019, thanks to the existing agreements, a virtual free trade area will be concluded in South America.

Brazil is currently seeking to complete that network of agreements, expanding its trade agreement with Mexico, the second largest economy in Latin America. We have reached with all Pacific Alliance’s countries agreements on investment facilitation agreements and we have signed, or are negotiating, agreements on services and government purchases.

In 2016, Mercosur exports to the Pacific Alliance reached $ 17.6 billion, more than the exports among the Alliance’s countries themselves ( $ 14.6 billion). Brazil, individually, is the main trade partner in Latin America of Chile, Peru and Mexico, and the second of Colombia.

The cooperation agenda between both blocs aims at going beyond the current trade agreements and also seeks to simplify foreign trade procedures and encourage business associations, with special attention to small and medium-sized enterprises. We also want to take advantage of the existing complementarities between our economies and to consolidate regional production chains.

The links between Mercosur and the Pacific Alliance are now strengthened by a coincidence of visions between our governments, which understand that there is much to gain from convergence between the two blocs.

The Brazilian economic situation and the global external outlook provide an opportunity that should not be wasted for Brazil and Mercosur to strengthen integration with their neighbors, in search of a new cycle of development. I am sure that the meeting we will have today will help to promote the integration between these two brother blocs, opening a new and auspicious chapter in Latin American integration.

Aloysio Nunes Ferreira is the minister of External Relations of Brazil

The original version was published in Spanish, in the newspaper La Nación (Buenos Aires)