Paraguay has no Objections to Mercosur-China Negotiations

By BKM-BERKEMEYER

Negotiations for a free trade agreement between China and Mercosur -the South American trade bloc formed by Argentina, Brazil, Paraguay and Uruguay- have been ongoing for years. While an agreement was announced in 2019, it hasn't been finalized yet.

During the Mercosur summit the past week in Paraguay, Uruguayan President Luis Lacalle Pou highlighted the current concord among member countries and announced that he would relaunch dialogue mechanisms with China.

Paraguayan President Santiago Peña assured that Paraguay "has no objections" to a potential negotiation between Mercosur and China, as Uruguay proposed. 

The potential benefits of the FTA are significant. It could increase trade flows, promote economic growth, and create new investment opportunities. China is a significant trading partner for Mercosur countries. The total trade between Mercosur and China has grown substantially over the years, with China being a major importer of commodities such as soybeans, iron ore, and beef from Mercosur countries, and Mercosur importing manufactured goods from China.

However, there are also concerns. Negotiations have been ongoing for several years, with rounds of talks addressing various aspects of the agreement, including tariff reductions, rules of origin, intellectual property rights, and dispute settlement mechanisms.

Weaker enforcement of patents, trademarks, and copyrights in China could disadvantage Mercosur companies whose innovations might be more easily copied. Also, the agreement might include provisions requiring Mercosur countries to share technology with China in exchange for market access, which could raise concerns about protecting sensitive technologies.