Latin American Mercosur nations to commemorate 30th anniversary
Mercosur member states—Argentina, Brazil, Paraguay and Uruguay—will hold a virtual summit today, commemorating the 30th anniversary of the bloc’s constitution.
The bloc recorded a historic economic contraction in 2020. The two biggest economies, Brazil and Argentina, experienced a fall of 4.1% and 10% of their GDP respectively, triggered by a fall in commodity prices, reduced capital inflows and a significant drop in trade. Likewise, the summit comes amid uncertainty surrounding Mercosur’s agreement with the EU. Two years after reaching the trade accord, Europe’s concern regarding Amazon deforestation and Brazilian President Jair Bolsonaro’s wavering commitment to tackling climate change jeapordise the agreement’s future.
Expect today’s meeting to reinforce Mercosur’s integration agenda on key issues like physical and digital infrastructure, citizenship statutes, value chain integration and trade facilitation. Nevertheless, the bloc has yet to achieve substantial results in boosting trade. To combat this, Mercosur will likely soon prioritise resolving core institutional issues such as common external tariff discussions and structural weaknesses that prevent effectively reaching organisational consensus. The EU, for its part, is unlikely to ratify the agreement without the South American bloc meeting its demands for real action in combatting deforestation, regardless of Brazil’s willingness to attend fruitless discussions.
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