Similarities and differences within the region

Mercosur inked trade agreements with Bolivia, Chile, Israel, and Peru in its first decade, while trade within the bloc jumped from $4 billion in 1990 to more than $40 billion in 2000. The group also began trade negotiations with the European Union in 1999. Those talks stalled for many years, but they have regained momentum in recent years.Regional integration began to slow following Brazil’s currency devaluation in 1999 and Argentina’s financial crisis in 2001, and since then trade disputes and other tensions have flared between the two countries. In 2011 Argentina cancelled automatic licensing for hundreds of imports, causing delays at ports and contributing to a 15 percent decline in Brazilian exports over the next year.

Mercosur countries have also failed to coordinate their trade policies toward third countries. For instance, Brazil unilaterally imposed antidumping restrictions on steel imports from China in 2011. “Politically negotiated exceptions to the bloc’s rules became the norm,” the Economist wrote.

Experts say integration has been further stifled as Mercosur economies continue to fall back on protectionist policies and show reluctance toward creating value-added supply chains or regional production hubs. Instead, Latin America’s traditional reliance on low-value-added commodity exports, particularly to China, continued during the commodities price boom of the 2000s. Many economists argue that this has contributed to the disappointing growth of trade within the bloc, which has fallen since 1998 as a share of members’ total trade.