Brazilian Relation with Regional Blocs
As a major economic and political force in Latin America, Brazil is part of various trade blocks in the region. In this article, we will learn more about regional economic and political blocks that Brazil holds relations with.
Economic blocks
Brazil is part of multiple trade blocks, especially concentrated in South America.
Aladi
Aladi stands for Asociación Latinoamericana de Integración, which is Spanish for Latin American Integration Association and is the earliest trade block in Latin America, created in 1980. There are actually 13 members in Aladi:
- Argentina
- Bolivia
- Brazil
- Chile
- Colombia
- Cuba
- Ecuador
- Mexico
- Nicaragua
- Paraguay
- Panama
- Peru
- Uruguay
- Venezuela
Aladi treats countries differently according to their development level and works towards the creation of a Latin American common market, through means of different mechanisms, such as the Regional Tariff Preference, which gives international trade tariff benefits to its members.
It was from Aladi’s discussions that Mercosur and the Andean Community of Nations spawned.
Mercosur
Mercosur stands for Mercado Común del Sur, which is Spanish for Southern Common Market, and is the most successful economic trade block in which Brazil participates. It was originally formed by Argentina, Brazil, Paraguay and Uruguay in March 1991, who are still full-time members.
Its main objective is to promote the integration of its members by means of free circulation of goods, services and inputs. Mercosur also seeks to amplify trade between its members as well as trade with other countries located outside of it. In 1995, Mercosur members instituted an Unified Import Tax rate, called TEC, which stands for Common External Tariff.
Venezuela was accepted into the trade block in 2012 as a full-time member and Bolivia, Chile, Colombia, Ecuador and Peru are associated members. Being an associate member means that they can participate in Mercosur meetings but, they do not have the right to vote in its decisions.
Mercosur, as the most active of the regional blocks of which Brazil is a member has accomplished many important measures, especially regarding interstate mobility of its citizens. Along with citizens of Bolivia and Chile, people that are citizens of a Mercosur country that has been a member for at least five years can obtain the right to live temporarily in another Mercosur country more easily and with fewer requirements, such as a valid passport, birth certificate and clearance certificate of criminal records. The right to temporary residence in other Mercosur countries can be extended to a right to live permanently in that country upon proof that the emigrant has the capacity to maintain themselves and their family.
It is also possible for citizens of Mercosur members to travel freely between Mercosur countries with only their National Identification Document.
Another project that will be implemented in Mercosur is a unified license plate for cars. This unified licensing system will start being implemented in 2016.
In addition to these, Mercosur also holds multiple trade agreements with other countries and trade blocks. For instance, a Free Trade Zone was created between Mercosur and the Andean Community of Nations in 2004. Foreign exchange between members of both trade blocks amounted to around USD 25 billion in 2013.
There is also a free trade agreement between Mercosur and Israel. This agreement was signed in 2007 and covers 90% of the trade flow, with a schedule consisting of four phases to remove restrictions to foreign trade. Estimates by both parties say that foreign exchange will reach USD 5 billion in 2017. A more recent free trade agreement was signed between Mercosur and Egypt in 2010. Foreign exchange between Egypt and Brazil - which is Egypt’s most important trade partner in Mercosur - amounted to around USD 3 billion in 2013.
Political Blocks
Brazil, as a prominent political force in Latin America since the beginning of the 1990s, is involved with many political blocks.
OEA
OEA stands for Organización de los Estados Americanos, which is Spanish for Organization of American States. OEA was created in 1948 for the purposes of regional solidarity and cooperation among its member states. Some may see it as a measure by the United States of America to counter potential influence from the Soviet Union in the area.
The organization’s main goals are:
- Strengthening democracy
- Peacekeeping operations
- Defense of human rights
- Fostering free trade
- Fight against drug trafficking
- Promoting sustainable development
As the largest international organization in the Americas, it is comprised of 35 members:
- Antigua and Barbuda
- Argentina
- Bahamas
- Barbados
- Belize
- Bolivia
- Brazil
- Canada
- Chile
- Colombia
- Costa Rica
- Cuba
- Dominica
- Dominican Republic
- Ecuador
- Guyana
- El Salvador
- Grenada
- Guatemala
- Haiti
- Honduras
- Jamaica
- Mexico
- Nicaragua
- Panama
- Paraguay
- Peru
- Saint Kitts and Nevis
- Saint Lucia
- Saint Vincent and the Grenadines
- Suriname
- Trinidad and Tobago
- United States of America
- Uruguay
- Venezuela
Unasur
Unasur stands for Unión de Naciones Suramericanas, which is Spanish for Union of South American Nations. Unasur was created in 2008 and brings together in a political-economic integration project the two major trade blocks in South America: Mercosur and the Andean Community of Nations.
Its full members are:
- Argentina
- Brasil
- Bolivia
- Chile
- Ecuador
- Guyana
- Peru
- Suriname
- Uruguay
- Venezuela
Unasur’s main objective is to build a space where cultural, social, economic and political articulation between the countries in this region can be held. Among its top priorities are the elimination of socioeconomic inequalities, social inclusion and citizen participation, as well as strengthening democracy.
CELAC
CELAC stands for Comunidad de Estados Latinoamericanos y Caribeños, which is Spanish for Community of Latin American and Caribbean States. CELAC was officially created in February 2011, although its members were already envisioning its creation since 2008.
CELAC brings together, for the first time, 33 countries from Latin America and the Caribbean:
- Antigua and Barbuda
- Argentina
- Bahamas
- Barbados
- Belize
- Bolivia
- Brazil
- Chile
- Colombia
- Costa Rica
- Cuba
- Dominica
- Dominican Republic
- Ecuador
- El Salvador
- Grenada
- Guatemala
- Guyana
- Haiti
- Honduras
- Jamaica
- Mexico
- Nicaragua
- Panama
- Paraguay
- Peru
- Saint Lucia
- Saint Kitts and Nevis
- Saint Vincent and the Grenadines
- Suriname
- Trinidad and Tobago
- Uruguay
- Venezuela
CELAC was created in order to deepen Latin American integration and to reduce the influence that the United States of America exercised on Latin American matters in OEA meetings.
Other non-regional blocks
Brazil participates in a variety of other political and economic blocks that are not only comprised of Latin American countries.
BRICS
Comprised of Brazil, Russia, India and China since 2006, with the posterior addition of South Africa in 2011, BRICS brought together the countries with the most expressive developing economies in the mid 2000s. Although it still does not have a formalized structure, functioning generally as a space of dialogue between these countries.
In 2013, foreign exchange between these countries accounted for a whooping USD 6,5 trillion. In 2014, these countries agreed to create a new international bank, the New Development Bank, which would be an alternative to the World Bank and the International Monetary Fund.
G-20
G-20 is an informal international forum that brings together industrialized and developing countries to discuss matters such as global economic stability. It was created in 1999 as an answer to the financial crisis of the 1990s. G-20 is composed of the following countries:
- Argentina
- Australia
- Brazil
- Canada
- China
- France
- Germany
- India
- Indonesia
- Italy
- Japan
- Mexico
- Russia
- Saudi Arabia
- South Africa
- South Korea
- Turkey
- United States of America
- United Kingdom
The European Union is also a member of G-20 and heads of the International Monetary Fund, and the World Bank attend its meetings. Brazil presided over G-20 meetings in 2008.