MERCOSUR'S POST-BREXIT RELATIONS WITH THE UK
Negotiating a trade and investment agreement: a priority objective?
by Félix Peña
English translation: Isabel Romero Carranza
Great Britain has -and has historically had- a relevant
importance for the economies of the Mercosur countries and, after Brexit,
it continues to have a significant and preferential trade relationship
with the European Union.
Moreover, there is still a possibility that Mercosur
will eventually also have a preferential trade relation with the EU itself.
This is something that today would seem to depend on the European will
to put into effect the agreement whose negotiation, in principle, has
been formally concluded..
Beyond the historical ties that each of the Mercosur countries has
with Great Britain, there are many factors that lead to attribute future
importance to the negotiation of a "post-Brexit" preferential
trade agreement between the two parties.
A first factor refers to the relevance of Great Britain in the international
system, especially in terms of its economic and commercial dimension.
Certainly, it is a relevance that is more understandable if one takes
into account Britain's own vision of its post-Brexit reality.
Another factor to consider is related to a characteristic that Great
Britain has always sought to have in its international insertion, which
is to be a bridging country, with the conditions to serve as a connection
between different players in the international system. This is a valuable
capacity for any attempt to build spaces of cooperation between very different
nations that, at the same time, can be linked to each other.
Finally, a third factor should be -especially from an Argentine perspective-to
introduce firm commitments, which, if well conceived and developed, may
allow an intelligent solution to the pending issue of the sovereignty
of the Malvinas Islands.
Adding these factors together and placing them within the perspective
of an agreement aimed at redesigning both the role of Great Britain in
the world and its special relationship with the EU, as well as that of
the countries of Mercosur inserted in a special relation with the Latin
American region, would make this eventual agreement an interesting precedent
for the approach of a future international order based on the convergence
of the diversity of multiple regions.
Upon completion of the Brexit process on January 1, 2021, Mercosur's
trade relationship with Great Britain will require the negotiation of
a special agreement to ensure its preferential scope within the framework
of the WTO. (In this regard, see the article by Norberto Pontiroli for
the Grupo de Productores del Sur (GPS), included as recommended reading
at the end of this newsletter).
It is worth remembering that Great Britain has -and has historically
had- a significant importance for the economies of the Mercosur countries
and that, after Brexit, it continues to have a preferential trade relation
with the European Union. (In this regard refer to the text of the agreement
between the United Kingdom and the EU, concluded on December 24, 2020
and an assessment of the post-Brexit relations between both parties, in
the European Commission documents included as recommended reading at the
end of this newsletter. See also the documents originating from the UK
government included in the same section).
It is still a possibility that Mercosur will eventually also have a preferential
trade relation with the EU itself. This would seem to depend on the European
will to put into effect the agreement whose negotiation has, in principle,
been formally concluded (see in this respect our comments in several issues
of this newsletter, especially during the period after the conclusion
of the commercial part of the bi-regional agreement). However, it also
depends on the image of credibility of the future of Mercosur itself.
In this regard, it is worth reading the recent article by Renato Baumann,
with the suggestive title "¿Ainda Mercosul?" ("Still
Mercosur?"), published in the newspaper Valor Económico of
Sao Paulo on January 25, 2021 (see the reference to this article as recommended
reading of this Newsletter).
Beyond the undeniably tight historical links of each of the Mercosur
countries with Great Britain, which have not always been perceived as
having a positive scope, there are many factors that lead to attribute
future importance to the negotiation of a "post-Brexit" preferential
trade agreement between the two parties.
A first factor refers to the relevance that Great Britain has in the
global international system, especially because of its economic and commercial
dimension. Certainly, it is a relevance that is more understandable if
one takes into account Britain's own vision of its post-Brexit reality.
Some recent publications are recommended in order to fully grasp the
scope of a positive vision of the relevance that Great Britain will have
in the world of the future. All of them are very useful to undertake the
necessary task of trying to understand, from the Mercosur countries, the
perspectives of those with whom we are trying to negotiate agreements
that aspire to have long-term effects.
Without excluding others, the following are, in our opinion, highly recommendable
publications, due to their current relevance and content:
- The first is the report by Bob Seely and James Rogers, entitled "Global
Britain: A Twenty-First Century Vision" (The Henry Jackson Global
Britain Programme, London 2019).
- The second is the book by Alex Brummer, "The Great British Reboot.
How the UK Can Thrive in a Turbulent World" (Yale University Press,
New Haven and London, 2020).
- A third publication is the paper by Robin Niblett, "Global Britain,
global broker. A blueprint for the UK's future international role"
(Research Paper - Europe Programme, Chatham House, London, January 2021).
- Finally, another recent publication is the book by Philip Stephens,
"Britain Alone. The Path from Suez to Brexit" (Faber &
Faber Limited, London 2021.
Two concepts are central to Alex Brummer's book and are reflected in
the title. One is that of restarting or rebooting the British strategy,
in the sense of starting over or going back to square one. The other is
that of the uncertainty of the global context. Combining the two gives
us an idea of the scope of the approaches developed by the author.
These publications encourage a positive view of the role that Great Britain
can play in a world that is increasingly uncertain and, at the same time,
characterized by the presence of multiple significant players in the global
trade of goods and services and in transnational investments. Also, because
of Britain's proven ability to influence the construction of the international
Another factor to be taken into account is that Great Britain has always
sought to be a bridging country in its international insertion, with the
conditions to serve as a connection between different players in the international
system, characterized by their different dimensions and even different
perspectives on politics and the international order.
In this regard, we stated in our article published in the Foreign Trade
Supplement of newspaper La Nación, on February 13, 2020, that one
of the objectives of the Mercosur agreement with Great Britain should
be precisely aimed at strengthening their respective capacities to operate
as bridges between countries of different regions, both developed and
developing. This is a very valuable capability for any attempt at building
spaces of cooperation between different countries which, at the same time,
need to be linked to each other, and without the perspective of becoming
dominant powers. (On trade relations between Argentina and Great Britain,
see Félix Peña, "Relaciones comerciales entre Argentina
y Gran Bretaña: perspectivas hacia el futuro", ("Trade
relations between Argentina and Great Britain: prospects for the future.")
article written on the occasion of the 100th anniversary of the Argentine-British
Chamber of Commerce, 2015, and published on www.felixpena.com).
Finally, a third factor should be -especially from an Argentine perspective-
the introduction of firm commitments, which, if well conceived and developed,
may enable an intelligent solution to the pending issue of sovereignty
over the Malvinas Islands. It is obvious that this will not be an easy
endeavor, and that it may mean that the steps taken in the right direction
require an even longer period of time than would be desirable. The recent
experience of the non-inclusion of products originating in the Islands
in the agreement concluded between the EU and Great Britain is not a minor
fact when considering the future of the issue of the islands in a reasonable
Considering all these factors and viewing them in the perspective of
an agreement projected to reset both Great Britain's role in the world
and its special relation with the EU, as well as that of the countries
of Mercosur within its special relation with the Latin American region,
would make this potential agreement an interesting precedent for the approach
of a future international order based on the convergence of the diversity
of multiple regional spaces.
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Félix Peña Director
of the Institute of International Trade at the ICBC Foundation. Director
of the Masters Degree in International Trade Relations at Tres de Febrero
National University (UNTREF). Member of the Executive Committee of the
Argentine Council for International Relations (CARI). Member of the Evian
Group Brains Trust. More