China’s South America free-trade deal to have ‘clear impact’, but may irk US by seeking opportunities in its ‘backyard’
- The election of Luiz Inacio Lula da Silva as president of Brazil has raised the possibility of a free-trade deal between China and the Southern Common Market (Mercosur)
- Mercosur is made up of Argentina, Brazil Uruguay and Paraguay, although any deal could create further tensions between Beijing and Washington, analysts said
A proposed free-trade agreement between China and a group of South American nations, which includes Argentina and Brazil, will benefit all sides economically, but will further increase competition between Washington and Beijing in the so-called backyard of the United States, according to analysts.
New leftist Brazilian President Luiz Inacio Lula da Silva said that the proposed deal between China and the Southern Common Market (Mercosur), which also includes Uruguay and Paraguay as full members, will modernise and open up the South American trade bloc to other regions.
A possible agreement can be discussed after a similar free-trade agreement (FTA) with the European Union is finalised, added Lula, who returned for a third term as president in January.
“The unilateralism and hegemonism of the US contradict with the multilateralism and an open regionalism of Mercosur, including those in Latin America and Caribbean,” said Xie Wenze, a professor with the Chinese Academy of Social Sciences’ Institute of Latin American Studies.
It is clear that in recent years China’s economic presence on the continent has grown remarkably, and therefore it is natural that opportunities such as the signing of FTAs begin to emerge
Lula’s election had already renewed hopes of the deal with the European Union 20 years after negotiations started, and reports suggest it could be ratified this year.
