Brazil-Mercosur trade and investment ties may pick up

Subject

The outlook for Mercosur trade relations.

Significance

Brazil plays a central role in regional economic integration, particularly through its influence over the other Mercosur founding members, Argentina, Paraguay and Uruguay. However, trade and investment relations experienced a period of slowdown until recently. Bilateral relations with Argentina remain important, accounting for more than three-quarters of Brazil’s trade flows within Mercosur, despite three years of low Brazilian investments in its neighbour.

Impacts

• Brazil’s economic recovery will be central to boosting regional dynamism within Mercosur members.
• Brazil can further explore its potential as a hub for other partners in Latin America.
• Stronger integration between Latin American economies may facilitate relations with potential investors in the region.