After 25 years of negotiations, it appears to be finally announced.
The opening between the parties, however, comes at a time when the geopolitical trend has pointed in the other direction.
On one side of the Atlantic, he envisions his mandate to protect North American industry. At the other end of the Ocean, among the countries that make up the EU, .
This turn to protectionism is not coming now. Since the movement known as Brexit, an isolationist and anti-globalization logic has increasingly grown in countries.
Amid this scenario, the Mercosur-EU agreement is consolidated as “a breather for what is possible to maintain from an era of globalization. It is a lifeline for both sides”, points out Leonardo Trevisan, professor of International Relations (IR) at ESPM and master in History of Economics.
Carolina Pavese, PhD in IR from the London School of Economics, highlights the point by indicating that the signature is a victory for those who find themselves in a moment of legitimacy crisis.
While Mercosur faces barriers to coordinating regional integration; the EU still faces the aftermath of Brexit, the slowdown in the German economy, the war in Ukraine and government collapses, .
“Finalizing this agreement would reinforce the importance of these diplomatic ties, the ability to negotiate and find common ground between countries that are so politically divergent,” says Pavese.
Globalization
The idea of rapprochement between countries gained strength in the 90s after the collapse of the Soviet Union and, consequently, the end of the Cold War. The geopolitical scenario moves away from capitalist and socialist bipolarity in search of regional integration for mutual growth between nations.
“With the end of the Cold War, you have a new wave of regionalism and trade agreements that are becoming stronger”, explains Carolina Pavese.
“The globalization proposal emerged at the end of the 90s and gained strength on the political agenda. At the time, it was used as a synonym for progress, with great hopes for economic growth being placed on globalization”, concludes the doctor from the London School of Economics.
Materially speaking, the globe has reached a point of breaking barriers and greater connection, not least because of the technological innovations that have emerged and been quickly shared in the last 30 years. Looking at this scenario, Pavese emphasizes that “the world is more interdependent now”.
It was in the midst of this scenario that in 1999 negotiations were born to bring Mercosur and the EU closer together. The process, however,
Deglobalization
The recent process of rupture is the result of a confluence of social, political and economic factors that, despite the peculiarities of each country, are repeated as patterns in some places, according to experts interviewed by the CNN.
Deborah Bizzarria and Magno Karl, public policy coordinator and executive director of the Livres movement, respectively, highlight:
- The increase in the perception of risk in global chains: according to the economist and political scientist, the 2009 international financial crisis shook confidence in the globalization model; and the economic slowdown during Covid-19 has reportedly strengthened the perception that excessive reliance on global supply chains is risky. “Even though the vaccines that saved us from the coronavirus were direct results of globalization, the interruption of production chains, especially of products and technologies considered essential, reinforced the idea that there are products that must be produced locally”, they state.;
- Geopolitical changes: tension between the United States and China; and the war in Ukraine raised concerns about economic security, and the assessment that it would be necessary to reduce dependence on certain countries in strategic sectors, such as semiconductors and energy;
- Populist reactions to the perception of increasing inequalities: the development promises of globalization have not reached some segments of the countries’ population. “The perception that other countries or groups gained more from globalization generated political pressure for protectionist interventions and local industrialization, which came to the top of politicians’ priorities for the coming years”, point out Livres analysts;
- Coordinated industrial policies: Bizzarria and Karl point out that countries have been competing with each other to offer more attractive subsidies to industries. Among the nations, they list the United States, the European Union, China, India and Japan.
Pavese highlights the point raised by the two, and indicates that “a solution is sought in nationalism, as if globalization were the only one to blame for the countries’ internal problems”. According to the doctor in IR, these protectionist movements have an impact both from a political and practical point of view.
“Trade protectionism, as designed by Trump, creates barriers that will restrict trade flows and artificially make part of the global value chain more expensive, burdening the consumer. On the other hand, the speech drives xenophobia and the far-right agenda”, concludes Pavese.
However, she reinforces that globalization “has not dried up”, and that the world, despite this movement of deglobalization, remains strongly connected.
“If we analyze the economy, commercial relations and the value chains themselves, we are in a much more integrated process than 20 years ago, 30 years ago”, points out the doctor in IR.
Mercosur-EU Agreement
Countries like Ireland have been marked by protests by farmers against the agreement. In France, the government itself has been more openly opposed to the treaty. In the French case, .
But, with the signing of the pact, it is reinforced that .
“The agreement consolidates a process in which the world faces significant deglobalization. It will continue because the European industry looks at the competition and investment capacity in the United States, and notes that, with the planned tariffs, it will no longer be there in the near future”, points out Leonardo Trevisan.
“In a deglobalizing world, backward industries and advanced agribusinesses combine their interests. The agreement is reached because at the moment it is of interest to both sides, with exceptions. The pressures are very strong and real, not only is Trumpism frightening, but the voracity of Chinese industry is as well”, concludes the ESPM professor.
Pavese highlights the point by noting that Europe is “between a rock and a hard place” with the US and China, its largest trading partner and one of its main suppliers of basic inputs.
“The signature symbolizes that the European Union is still a ‘major international actor’, in a context that is about to become very dark for trade between countries”, concludes the doctor in IR.
