MERCOSUR/L AND REGIONAL DEVELOPMENTS IN LATIN AMERICA

1. MERCOSUR/L AND REGIONAL DEVELOPMENTSIN LATIN AMERICA

2. INTRODUCTION • Will look at • Mercosur/l as an organisation • SA relations with Mercosur/l • SA bilateral relations Argentina, Brazil • Current trends in Latin America generally

3. MERCOSUR/L • Spanish/Portuguese acronym for Common Market of Countries of the South • Members: Argentina, Brazil, Paraguay, Uruguay (Venezuela completing formalities) • Associate members: Chile, Bolivia, Peru, Mexico • Secretariat in Montevideo, Uruguay

4. MERCOSUR: BACKGROUND • Treaty of Asuncion, 1991: • Economic considerations, but also • Political considerations: • Drive for regional cohesion • Regional Parliament, May 2007

5. MERCOSUR: BACKGROUND • Need for regional cohesion expressed in formation of several multilateral bodies, eg: • Latin America Parliament (1964) • Andean Parliament (1969) • Central American Parliament (1987) • Indigenous Parliament of the Americas (1987) • Amazonian Parliament (1989)

6. SA and MERCOSUR • SA’s western neighbours • Similar colonial background • Political like-mindedness (Progressive governance) • Natural partners South-South cooperation • Competitors in some areas (traditional markets, commodities) but • Room for bilateral trade, investment • Allies in South context (eg UN, Bretton Woods revamp)

7. SA and MERCOSUR • MERCOSUR members significant players bilaterally and multilaterally • as a group (size, numbers, production share) • Individually (Brazil’s President Lula and Africa; Uruguay commitment to Africa – MONUC; Argentina’s size, potential, BNC)

8. MERCOSUR: TOWARDS A TRADE AGREEMENT • President Mandela’s address at Mercosul Summit, Florianopolis, December 2000 • Minister Erwin signed Declaration of Intent towards an FTA • Several rounds of negotiations: PTA first • Next round Pretoria 8-9 October 2007

9. MERCOSUR: INTERNAL • Imbalances larger, smaller economies (Argentina, Brazil cf Uruguay, Paraguay) • Tensions • Possible new proposals

10. ARGENTINA • Political developments • President Nestor Kirchner May 2003 • Elections: Senator Cristina Kirchner? • Economic developments • GDP US$180 bn (2005), US$211bn (2006) • Reduction of foreign debt

11. SA-ARGENTINA • BNC February 2007 • 11 Agreements concluded, 2 underway • Trade balance almost 5:1 Argentina’s favour • Trade study by SA Embassy • SA trade and investments: Anglo Gold; Standard Bank; Sappi; Irvin and Johnson; Naspers

12. SA-ARGENTINA • Multilateral • Similar policies, objectives: • Development agenda of South • Centrality multilateralism and UN system • Reform global economic governance, trading system • African Agenda • Argentina supportive

13. BRAZIL • Political developments • President Lula re-elected (last term, to 2010) • Survived several political scandals • Governing coalition controls 70% seats parliament • Economic developments • Actual GDP 2006: US$1 067 bn • January 2007: Accelerated Growth Plan

14. SA-BRAZIL • Political relations • Strategic partner (Presidents meet regularly) • Trilateral, bilateral, multilateral • Common challenges: income disparity, poverty eradication • Bilateral agreements, visits; Joint Commission • Economic relations • Total trade 2006: US$1,894bn (surplus Brazil) • Trade missions DTI; trade survey SA Embassy

15. SA-MERCOSUR/L • Conclusion: • Common goals, experiences • Strong partners South-South • Challenges: • trade imbalances • Conclusion SACU-MERCOSUR/L FTA/PTA