On June 28, Mercosur (the South American Trade Bloc), and the EU (European Union) reached a trade agreement, which represents one of the most important treaties in International Economic history. Because of Latin-American resistance to international trade, this sort of deal emphasizes a great shift from the early 1970s to 2000s import substitution ways of thinking.
President of Argentina Mauricio Macri has praised the deal’s significance President of Brazil Jair Bolsonaro called this the rebirth of the biggest economy in South America.
This trade deal also gives further evidence that the US comparative advantage system is still the main source of economic guidance and model of operation, rebutting further the idea of an alternative Chinese model in the International Economy.
The deal is a chance for all countries involved to enter into new markets, create more jobs, foster development, and build new bridges of diplomacy around the globe.
All of these benefits contribute to the overall growth of liberal values, customs, and standards in South America, which are very important to fortify the democratic institutions that preserve these values.
This agreement consists of three essential benefits for Mercosur member countries. First, it would bring these countries greater institutional strength and quality, by establishing ties of political, economic, and cultural significance with the EU. Furthermore, the deal presents a transparent and consensual agenda that reduces government discretion at the time of applying economic policies.
The second benefit would be the promotion of economic development in these countries, by granting greater access to goods and services, as well as investment. Additionally, it would either reduce or eliminate restrictions on traded goods and would simplify commercial operations.
Lastly, it favors regional integration, since the consolidated trade bloc,Mercosur, would promote these ideals throughout the rest of the South American countries who want access to the benefits that come with joining the bloc.
The deal will surely lead to greater development in the region. Moreover, the agreement could mark the start for countries in South America to open themselves to the International economy, paving the way to greater ties, relationships, and peace in the world. The deal opens the door for these South American countries to develop and further integrate the region. Now it will be up to them to continue these efforts.