The Asymmetries Between Mercosur and the European Union

Introduction

The European Union (EU) and Mercosur are two of the world's largest trading blocs. The EU is a highly integrated economic and political union of 28 member states that are located primarily in Europe. Mercosur is a customs union of five South American countries: Argentina, Brazil, Paraguay, Uruguay, and Venezuela.

The EU and Mercosur have been negotiating a free trade agreement (FTA) since 1999. The negotiations have been complex and challenging, due to the significant differences between the two blocs. The EU is a highly developed economy with a high standard of living, while Mercosur is a developing region with a lower standard of living.

The Asymmetries Between the EU and Mercosur

There are a number of asymmetries between the EU and Mercosur that have made the FTA negotiations difficult. These asymmetries include:

• Economic development: The EU is a much more developed economy than Mercosur. The EU's GDP per capita is over $30,000, while Mercosur's GDP per capita is less than $10,000.
• Trade: The EU is a major trading power, while Mercosur is a relatively small trading bloc. The EU's total trade in goods and services is over $4 trillion, while Mercosur's total trade in goods and services is less than $1 trillion.
• Investment: The EU is a major source of foreign direct investment (FDI), while Mercosur is a relatively small recipient of FDI. The EU's total FDI outward stock is over $10 trillion, while Mercosur's total FDI inward stock is less than $500 billion.
• Technology: The EU is a leader in technology, while Mercosur is a developing region with a lower level of technological development. The EU's total research and development (R&D) expenditure is over $300 billion, while Mercosur's total R&D expenditure is less than $50 billion.

The Challenges of the FTA Negotiations

The asymmetries between the EU and Mercosur have made the FTA negotiations difficult. The EU has been concerned about the potential impact of the FTA on its economy, particularly in the areas of agriculture and manufacturing. Mercosur has been concerned about the potential impact of the FTA on its development, particularly in the areas of trade and investment.

The Potential Benefits of the FTA

Despite the challenges, there are also a number of potential benefits of the FTA. The FTA could increase trade and investment between the EU and Mercosur, which could lead to economic growth and job creation in both regions. The FTA could also help to reduce poverty and inequality in Mercosur.

Conclusion

The FTA negotiations between the EU and Mercosur are complex and challenging, but there are also a number of potential benefits of the FTA. If the negotiations can be successfully concluded, the FTA could have a positive impact on the economies of both regions.

Call to Action

If you are interested in learning more about the FTA negotiations between the EU and Mercosur, I encourage you to read my book, "The Asymmetries Between Mercosur and the European Union." My book provides a detailed analysis of the negotiations, the challenges that have been faced, and the potential benefits of the FTA. I believe that the FTA is a important opportunity for both the EU and Mercosur, and I hope that my book will help to inform the debate about the FTA.