ASSESSMENTS

Trade Profile: Mercosur Lets Its Guard Down Gradually

Jul 31, 2017 | 09:15 GMT

The flags representing the four current Mercosur countries stand on display at a summit for the bloc in Mendoza, Argentina.

The Common Market of the South walks a fine line on global trade. The bloc, commonly known as Mercosur, has made great strides over the past three decades opening its economies to foreign competition and increasing international trade -- both among its members and with more distant partners. When compared with other major trading blocs in the hemisphere, however, Mercosur is still far more protective of its domestic industries. Brazil and Argentina, the two South American states at the heart of Mercosur, rely on an array of tariff and non-tariff barriers to shelter their politically sensitive sectors and keep their trade balances on an even keel. As the bloc matures, it will liberalize in fits and starts, but lingering protectionist and populist policies will limit its ability to do business with others....

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