After the entry of states into several economic alliances simultaneously, the ways of national state regulation of any economy, as a rule, are narrowed. State regulation is always part of the economic sovereignty of a particular country. And membership in alliances in one way or another always reduces its economic stability: national and bloc systems of tariff preferences begin to bind each other.
Mikhail Bernovsky, Specialist in Trade and Customs Policy
Source: Source: Globalaffairs.ru
It is difficult to remain fully in the national priority due to block obligations, and to open Trade without restrictions - to lose part of industries and budget revenues from import customs duties and taxes. However, many countries are pursuing multi-vector partnerships with both richer and poorer economic actors.
Today, under the rules The WTO Each country can withdraw an important part of the nomenclature from preferential imports or reduce import rates to zero. Thus, the meaning of multilateral commitments is generally relevant. There must be some comprehensive benefit that often carries equally complex risks.
In the case of free trade zones, combined with membership in customs unions, mutual obligations are regularly reviewed.
The more commitments a country has in different international unions, the more difficult it is to constantly focus on exemptions and restrictions from free-trade agreements and balance in negotiating positions. Especially when purely economic unions have to get along with purely political ones.
This is the problem of determining the national priorities of many countries (not only Europe and South America) in conditions when the largest customs union of the countries of South America Mercosur now has an agreement with the EU on a free trade zone.
What is the real picture of the potential of foreign trade regulation of Mercosur and the European Union, if we consider it in the projection Latin American economic plans- What about that? Will Brazil’s economic policy become the center of contradictions on the continent as a co-founder of BRICS and at the same time the largest participant of Mercosur?
After twenty years of negotiations, and they have been active since 2005, the Mercosur Global Customs Union has signed a free trade agreement with another global customs union. The European Union. . . . It is no coincidence that such lengthy conversations were embodied in the document only at the time of the shift in technological patterns and the growth of the paradoxes of multipolarity. And even against the background of the current prospects of difficult solutions in the US-EU-Greenland triangle, mixed in a cocktail with Trump’s signature rhetoric about tariffs for the European Union and fresh. «The precedent of Maduro».
The whole complex of problems caused the Europeans to accelerate the emergence of the EU in the sector of traditional influence of the United States in the space of action. «The Monroe Doctrine». . . . At the same time, the interests of the European Union unexpectedly crossed with interests. The BRICS. . . . The largest and most powerful player of BRICS and Mercosur is Brazil. But BRICS has not become a free trade zone and has focused on coordinating strategic investment influence in the world. The rhetoric about the dollar gave rise to a hostile attitude towards the BRICS from the United States, and the absence of free trade obligations within the BRICS means complete freedom of economic doctrines of each of the participating countries. That is, going back to the issue of sovereign state regulation of foreign trade, in BRICS all remained in their interests. The creation of the BRICS bank and the bloc’s investment plans seem to be aside from the merger of Mercosur and the EU, as investing in infrastructure in the region of foreign trade and industrial activity is pointless.
BRICS now accounts for 25 per cent of global GDP, while Mercosur + EU accounts for 20 per cent of global GDP. Thus, Mercosur and the EU overlap the economies of China and India, even if they deduct the GDP of Brazil, which is part of both unions. And it is Brazil that can become part of two blocs of countries, for the influence of which the struggle is underway. This situation carries economic and political risks to stability in the country. For the European Union, the Mercosur agreement is a strategically important alliance with the entire continent. For BRICS, it is a very complex system of Chinese, Indian and common block priorities for investment and influence.
The agreement with South America creates an argument for the EU for potential talks on Trump’s tariffs. However, in the logic of increasing the capacity of the NATO bloc, the EU’s friendship with the EU Countries of Mercosur Unambiguous strengthening of the military alliance.
As soon as we reached military-strategic conclusions, the political positions of the leaders of the countries of the region begin to play an even more prominent role in the issues. «strengthening or weakening» influence in Latin America of China, India and Russia. First of all, we are talking about prices and guarantees in world trade and their management.
Europe has long been strained. Chinese Logistics their time of supply of goods for European retail. But even more this tension was felt in the market of goods for production purposes. Among other things, Chinese enterprises have ceased to differ in low prices. We needed an alternative and it was worked out. If a quarter of a century ago the idea of rapprochement between the European Union and Mercosur arose, the picture of the world was different. Chinese producers were attractive to foreign investors due to low prices for final export goods. At that time, Europe did not seem fit to throw itself into the arms of Mercosur. But time went by, China’s economy grew, as did its economic independence from yesterday’s investors. China remains a reliable partner, but on other terms and for other money. Geopolitics over the past two decades has also taken a different shape.
A new partner has been found. Global in geography, rich in the nomenclature of raw materials, poor in the price of labor, arguing and competing with each other. And at the moment very politically unstable. But the EU has no other investment addresses and no sovereign investment funds.
China is not rubber, although much remains there. Both problems with the political stability of South American countries and the preservation of China as a universal global export factory «Without Borders» - I think it won't be long. At least on the basis of American traditional strategies.
Now, according to the most comprehensive indicators, it is worth understanding what the investor - a trading partner expects, seeing the country with 25-30% of the population below the poverty line, huge public debt, 8 percent of unemployment, cheap labor, energy and extractive sectors. Chemical and metallurgical production, including components for ammunition and military equipment, is the most effective with such input data. Add to this the food industry in local agricultural raw materials, textile industries. And we get a great increase in the defense capability of the investing country. Especially when all investors are members. The NATO bloc.
To understand why the current state of world politics and the world economy is not long, let us turn to the UN statistics. Specifically to UNCTAD. . . . Its analyst notes that the main trends in global trade and development will have a very uneven distribution pattern on the planet. That is, for example, more than a hundred states (by the way, «The Global South») will forever lag behind global processes of digitalization, AI and big data in general. Does developing countries have such a perspective? Will alliances and alliances help them make a breakthrough?
This is the case of many Latin American countries. That is, while there will go (conditionally) oil, ore, wool and meat, technology will go back, including digital. These are classic trade signs of the economic meaning of a famous picture. «Unequal Marriage». . . . For the next few years, but not forever.
Also also UNCTAD fixes the historical lows of foreign direct investment in most countries – traditional recipients, so that previously successfully invested sectors of the economy have ceased to bring the investor calculated monetary results. What can compensate for the lack of monetary results? Only to achieve more global military and political goals. The entire investor world, fraught with the risks of globalism, takes a turn towards focusing on the sectors of the economy and the blocs of countries to ensure the national inter-industry balance sheets, first of all the countries themselves – investors. In the interests of their defense capability, not the development of developing countries.
Back to Latin America and Mercosur. Venezuela's membership has long been suspended, while Mexico is held remotely. These states today are entirely in the sphere of influence and interests of the United States. However, in pursuit of the rich markets of the Mercosur country, although the free trade alliance with the European Union has entered, the US foreign trade balance has not gone anywhere. It’s not like the Chinese foreign trade balance. The United States and China have been among their export partners for a long time, almost the entire twenty-year period of MERCOSUR negotiations with the EU.
There is some difference in the basic sectors of the Mercosur economy. In Brazil - engineering, ore industries. Colombia has a chemical industry, oil. In Argentina - engineering, meat livestock, ore industry, grain production. The status of the customs union with Mercosur and the EU is an ideal scheme for the commodity distribution of export-import flows and trade for export and domestic consumption. It clearly implies the unhindered movement of goods from one point to all countries of the two unions. It's a veer. With perfect distribution and transport consolidation. And the U.S. investment trend is not like adjusting the rolling distribution of U.S. exports across the continent, but rather to create production enclaves and industry clustering in the interests of the United States. Concept of concept MAMA MAMA MAMA.
From the point of view of the theory of management, the configuration of the economic system described above is similar to a fairly planned, and therefore partly a mobilization model of the economy built in the region in the interests of developed countries. Both the European Union and the United States will somehow seize part of China’s Latin American interests – as happened with Venezuelan oil, only, apparently, more market-oriented, not by force. In this case, new forms of continental (at least bipolar with the EU and the US) neo-globalism will be formed in South and Central America, and the countries themselves will no longer be able to form national systems. Protectionism.
No investors contribute to the rapid technological growth of the emerging economies of Mercosur. These countries have a very ghostly chance to preserve and develop their industry structure in the new investment and technological cycle for the next fifteen years.
Even the major economies of Mercosur will have to maneuver between the interests of Washington, Brussels and Beijing in order not to get caught up in external structural economic and price diktat. Based on the above risks, the agenda includes the priorities of political preferences of the continent’s largest country, Brazil, as a co-founder of both BRICS and Mercosur. Taking into account the interests of China as its system partner, Block of BRICS bilateral economic and political integration. Will the third South American continent develop? «The Pole's the Pole»Where Brazil will increase its influence as a vehicle for the interests of China and India, it is not yet clear and doubtful.
Against the background of tickle «The Greenland question» And not the good attitude of the United States and the EU to the strategies of the BRICS from the United States should wait for the creation of their systems of checks and balances with complex negotiations on the division of spheres of industry and country influence. First of all, focusing on Mexico City and Venezuela. All countries in the region understand that international production cooperation and supply chains are money. «Swimming through». . . . Global, developing infrastructure investments are not expected soon. Therefore, in poor countries, all economic multipolarity now seems to be full of risks and surprises. But it is impossible not to participate in the construction of a new model of the world economy: no one alone will have enough sovereign resources for sustainable development – neither economic nor political. This is what determines the activity of the US and the EU in Latin America.
