MERCOSUR/L AND REGIONAL DEVELOPMENTS IN LATIN AMERICA

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

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

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

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)

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)

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)

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

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

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

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

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

BRAZIL Political developments Economic 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

SA-BRAZIL Political relations Economic 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

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