Deepening regional integration must be an essential component of any strategy for emerging from the crisis produced by the coronavirus disease (COVID-19) in order to move towards more sustainable and resilient trade. This entails strengthening our own production linkages and promoting intraregional trade, Alicia Bárcena, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), stated today.
The senior United Nations official spoke during the LVI Ordinary Meeting of MERCOSUR’s Common Market Council, in which the Foreign Ministers of the four countries that make up the bloc participated: Antonio Rivas, of Paraguay, in its capacity as President Pro Tempore of MERCOSUR; Felipe Solá of Argentina; Ernesto Araujo of Brazil; and Ernesto Talvi of Uruguay. Other speakers included foreign ministers, deputy foreign ministers and other senior authorities from the bloc’s Associated States, and special guests.
In her remarks, ECLAC’s Executive Secretary indicated that Latin America and the Caribbean is the epicenter of the COVID-19 pandemic today, and it simultaneously faces health, food, economic and social crises of enormous proportions that national efforts alone will not be able to resolve.
With a crisis of this magnitude, international and particularly regional cooperation is imperative, she stressed.
Alicia Bárcena added that the post COVID-19 world will be a regionalized world and that while the net result will not be a reversal of globalization, there will be a more regionalized global economy, with shorter value chains organized around three major production poles: North America, Europe and East Asia.
She emphasized that in a context in which the multilateral institutional framework is weakened and the rest of the world is moving towards greater regionalization of production, Latin America and the Caribbean cannot lag behind. For that reason, deepening regional integration must be at the center of any strategy for emerging from this crisis. This entails strengthening our own production linkages and promoting intraregional trade, which is more intensive in manufactured goods, she stated.
ECLAC’s highest authority warned that for the last decade, it can be seen that intra-MERCOSUR trade has lost relative weight. In 2019, she noted, such trade represented just 10.6% of the bloc’s total exports, hitting a historic low. Prior to the crisis, the bloc’s exports and imports were around 14% and 16%, respectively, she specified.
“Reversing this ‘hollowing out’ of MERCOSUR must be a priority, because intra-bloc trade contrasts with what occurs in other integration systems in the region. The Pacific Alliance only sends 3% of its trade towards its own countries; in MERCOSUR, in contrast, 59% of total exports to Latin America and the Caribbean stay within the bloc and 66% of what it imports from the region originate in the bloc,” the senior official affirmed.
She added that, given its magnitude, MERCOSUR can lead efforts to move towards a more integrated market, building bridges with the Pacific Alliance, the Central American Common Market and CARICOM.
Alicia Bárcena underscored that in the highly complex world that is approaching, we must think with a regional logic and leverage the scale offered by an economic space of 650 million inhabitants, break with our economies’ tendency towards primarization, and generate greater production capacities to create a more sustainable development pattern in line with the 2030 Agenda.
In this scenario of less multilateral cooperation, she added, regional agreement is indispensable for establishing a more symmetrical dialogue with the global economy’s main actors, above all on issues involving trade, debt sustainability, financing and liquidity provision. We need special drawing rights that will come to our economies, she emphasized.
“Moving towards the region’s integration has a technical and political complexity that is formidable; however, it is an essential goal and MERCOSUR is indispensable to achieving it. Keeping the integrating project embodied by MERCOSUR alive, relevant and active is more urgent today than ever, and it makes room for the evidence that we are stronger together and that the benefits of unity far outweigh the short-lived advantages of individual paths,” Alicia Bárcena concluded.