S. KOREA, CHINA SEEK MERCOSUR FREE TRADE DEALS
Asia giants look to grow presence in South America amid US protectionist stance
CHINA and South Korea are seeking to establish free trade agreements with Mercosur in a strategic response to United States increasingly protectionist stance.
These East Asian initiatives have resonated well in a region where Washington is keeping its distance. US President Donald Trump has not visited a single Latin American country since taking office in January last year, and chose not to attend the Summit of the Americas, which concluded on Saturday.
South Korean Prime Minister Lee Nak-yon last month agreed with Brazilian President Michel Temer to start formal negotiations for a free trade deal between South Korea and the South American bloc by June.
Mercosur also includes Argentina, Uruguay and Paraguay.
The pact would reportedly be designed to increase South Korean exports of consumer electronics and car parts and boost Mercosur ’s shipments of corn, soyabeans and other grains.
Seoul was forced to make significant concessions while renegotiating a six-year-old bilateral trade pact with the US late last month.
The Trump administration’s protectionist stance has left the country needing to boost trade with other countries.
With 260 million consumers, Mercosur is a potentially lucrative market for the country’s exporters. Moreover, importing more grain from South America would give Seoul leverage in its negotiations with Washington as the US exports considerable amounts of agricultural produce.
China is also keen on Mercosur markets. Earlier this year, Foreign Minister Wang Yi visited Montevideo and pressed the case for a China-Mercosur pact in talks with Uruguay’s President Tabare Vazquez.
Signing a free-trade agreement with China would give the country “access to a market of 1.3 billion”, Wang told the Uruguayan leader.
Trump’s protectionist agenda also gives Beijing the chance to expand its diplomatic influence in the region.
In January, an official at the Chinese Embassy in Brazil told a local newspaper that China was opening the door as “one person” is closing another.
China already has a key and growing economic presence in the region. In 2016, it was the destination for over 15 per cent of Mercosur exports, compared with the US share of 11 per cent.