Federico Reyes Heroles
The photo will remain: Four Latin American presidents and Ursula von der Leyen, head of the European Commission, shaking hands. Twenty-five years of negotiations are behind them. The European Union and Mercosur agree to create the largest free trade zone in the world! More than 700 million potential consumers are from the northern and southern hemispheres. Despite the distances, their economies have enormous complementary potential. The world is changing.
Imagine industrialized products and capital goods from the EU reaching – without tariffs – the 220 million Brazilian consumers. Or vice versa, Brazil’s agricultural and mining potential circulating in the Union. In the end, some European consumers buy food at a better price, and European automobiles circulate in Bahia. Brazil has always dreamed of becoming an empire, but its per capita product (PPP) still needs to reach US$ 9,000. Political balances are coming: a third of its exports go to China, which has already become its main trading partner. Lula da Silva is looking to Europe as the next stop in the development of the giant. Milei of an Argentina -50 million, less than $10,000 PPP- that was one of the world’s top ten powers a century ago, negotiating. The “breadbasket of the world” opening horizons beyond Brazil and… China. Lacalle Pou for Uruguay is a small country that always gives us lessons: exporting agricultural products, textiles, resins, and rubber. Paraguay -less than 7 million, 6 thousand 500 dls. PPC-, which generates envy for its hydroelectric capacity, today highly valued. There is much to trade, with profits for the companies, yes, but above all, for its citizens.
The most encouraging aspect is beyond trade, which will involve 31 countries and 100 billion in annual exchanges. Every trade agreement involves a civilizing pact. “Both parties – recalled Von der Leyen – believe climate change is the decisive challenge of our time… the agreement reflects our commitment to the Paris Agreement on climate change and the fight against deforestation”. This was heard in Montevideo when a team that does not believe in science and even less in climate change comes to power in the north of the hemisphere.
The German went further: “The European Union and Mercosur also share the conviction that international cooperation is the true engine of progress and prosperity”. And once again, to the north, Trump disbelieves in the multilateral mechanisms that he mistreated in his first term. The agreement went almost unnoticed in the US press, without realizing that his Chinese obsession was with Mercosur and the European Union. There will be many forms of resistance, the most visible being the agricultural producers of France, who have historically benefited from a certain degree of protectionism. But it is precisely this resistance that makes this agreement a very significant step forward for the world. Trade has been the gateway to many civilizational advances because behind it come democratic demands, freedoms, free and fair elections, and so on. Respect for human rights and a judicial structure guaranteeing a professional and independent administration of justice for all involved. Mexico, Take a look: it is a civilizing pact!
Therefore, it is encouraging that Sheinbaum has distanced herself from the back-and-forth with Trump and -once and for all has unequivocally acknowledged our membership in the North American bloc and the possibilities of the CUSMA/USMCA/T-MEC to “confront” China. More than confronting, perhaps it is a matter of dealing with the monster in beneficial terms for all parties and without deception. Our CUSMA/USMCA/T-MEC partners will hardly oppose its stance, even though on the same day, Trump launched the inhuman boast of deporting entire families, but “without dividing them” and talked about ending the “subsidy” (?) to Mexico.
Interesting weekend.
What will become of Syria?
Further Reading: