Mexico could join Mercosur later this year – Why this is good for “Latin America”
I am a Latin America business person. In many ways, I am a person who, by definition of my job, daily lives “Latin America”. And yet, one of the things that I think about the region, is that Latin America in many ways is just a concept. It is a convenient way to label all of the countries in the Americas south of the United States border.
It is very ironic, given the fact that strong heritage linked to Iberia is definitively here. Most of the countries in the region have ties to Spain and one has ties to Portugal. You travel through the region and you will find many common elements on the language, the religion, the values, the things people prioritize… in short you will see a common approach to life. And yet, when we look at in how many relevant issues does Latin countries really cooperate, we find that the list is really short.
Outside of a few areas in the region in which common infrastructure (either physical or legal infrastructure such as multilateral trade agreements) you will find very little in terms of regional integration. In some cases, obvious areas for cooperation such as energy have not seen any real progress in many years. Even worse, recent events such as the nationalization of Gas in Bolivia has placed some real barriers to energetic integration in South America.
In that history of regional lack of integration the news coming out of the Mercosur summit last weekend are very encouraging. Mexico’s Minister of Foreign Affairs, Luis Ernesto Derbez said that after the meeting Mexico has a clear path to join the trade block by the end of the year. Minister Debrez said that the concerns that Brazil had about Mexico’s membership of the block have disappeared and that now Brazil has a favorable view of Mexico joining the block.
Mexico and Brasil are the two largest economies in the region and the ones that really have a large and diversified industrial infrastructure. Despite the fact that there are product areas in which both countries compete, the number of industrial, agricultural or even service oriented goods in which economies have complementary products is large. For starters, Mexico has a historical deficit in it agricultural production while Brasil has emerged as a global leader in food production.
As a Latin American business person I believe that having the two largest economies as trade partners can lead to other countries following the same path. This in turn can start to add more meaning to Latin America, other than its geographical one.
