Mercosur. Together we are better

Mercosur is the largest market for Argentine companies, including SMEs, and also the most complex. There, we trade products with greater technology and added value than those we sell outside the zone. Mercosur worked: in 2007, it accounted for 16.8% of the bloc’s total exports, but today it accounts for only 10.5%.

We are trading less and less among ourselves: what options do we have left?

Become more flexible and move towards a free trade area (and lose bargaining power along the way).
Strengthen and reposition Mercosur (and deepen regional integration).
Do nothing (and maintain the current deterioration).

“If we were more flexible, we would negotiate better agreements.”

False. Within Mercosur, we can achieve better results: acting as a bloc allows us to negotiate better conditions and put together more attractive offers.

“If we were more flexible, we would export more.”

False, other countries in the bloc did expand their exports during this period. Furthermore, without Mercosur, we would export much more basic and less complex products: pure raw materials and few manufactured goods.

→ Mercosur needs to change, and Argentina needs to make better use of this space instead of using it as a scapegoat for domestic economic problems.

There are already exceptions to the bloc’s common external tariff, but Argentina used them to further close off its economy, unlike the rest. To follow the path of freedom, we don’t even need to touch Mercosur, just read the rules carefully and use them to our advantage.

While the regional foundations are being reorganised, we can still work on perfecting our use of the intrazone. If we want to open up the economy in a way that promotes development, we don’t have to break anything, just make better use of what we already have.

Recommendations for public policy

Putting national and regional foundations in order

A prerequisite for any path taken by Mercosur is to ensure the smooth functioning of intra-zone trade. This implies a commitment to removing barriers to intra-regional trade, including border infrastructure and technical and sanitary regulations. Argentina should lead the process and commit to a strategy of productive and export-oriented development from within the region.

Doing nothing is a bad idea.

The status quo is the worst-case scenario, as it leads to a gradual deterioration in the relevance of regional integration and inefficient use of the bloc, both in terms of the risks posed by the global scenario and the opportunities it generates.

Integrate Mercosur into a strategic policy for Argentina's international integration and development.

In any scenario, to be meaningful, Mercosur as a tool needs to be integrated coherently and consistently into a broader framework of international integration and development policies. It cannot be done without Mercosur, but it cannot be done with Mercosur alone either. This also means not making Manichean use of Mercosur in public discourse, nor using the region as a scapegoat for problems of national origin.

Expanding the dialogue table and building inclusive consensus

The path ahead for Mercosur has substantial distributive effects, which is why it is essential to involve the business sector, civil society and all political forces in the discussion. Only then will it be possible to design a long-term regional integration policy capable of overcoming ideological polarisation and ensuring stable agreements that benefit all actors equally.