FGV and Korea Foundation launch political orientation study about trade deal between Mercosur and South Korea  

Global value chains and regulatory innovations are the topics covered in the project, carried out in partnership with the Korea Foundation.
International Relations
18 January 2022
FGV and Korea Foundation launch political orientation study about trade deal between Mercosur and South Korea  

Presenting possible strategies and mechanisms to help make a trade agreement between the Mercosur trade bloc and South Korea viable is the aim of a set of policy papers developed by Fundação Getulio Vargas’ International Intelligence Unit (FGV NPII) in partnership with the Korea Foundation, one of South Korea’s most important foundations. The papers were written as part of a project called “Mercosur-South Korea Trade Agreement: A Framework for an Innovative Proposal,” which looked at how to overcome trade barriers, the gains that the Mercosur-South Korea agreement may yield for both parties and Asia’s growing financial importance in recent decades. The research methodology used had two perspectives: one focused on global value chains, and the another on regulatory innovations.

Two study groups to examine these two perspectives were formed, composed of South Korean and Mercosur experts. They produced the two final project reports, setting out objective proposals to improve the trade agreement. The development of the reports was based on an extensive literature review, discussion meetings and a series of interviews with representatives of the governments of the countries involved. “Despite a promising outlook, the negotiations still face concrete obstacles, namely the protectionist and conflicting interests of some sectors, such as manufacturing and agriculture,” explains Leonardo Paz Neves, the coordinator of FGV NPII and the editor of the documents.

Paz notes that after a series of diplomatic visits and informal talks, the Mercosur-South Korea trade agreement began to be designed in the first official round of negotiations, in 2018. “Since then, seven rounds have been held and the last one was in September 2021. It is easy to understand why these talks have attracted a lot of attention, due to the large size of the countries involved. It is hoped that the trade deal will boost economic growth and provide some relief for Mercosur’s economies,” he says.

According to Paz, this agreement could significantly expand trade between the parties, benefiting consumers by offering them better and cheaper goods while leading to real growth in GDP, exports and jobs. He says that the deal is of paramount importance to Mercosur, given that the bloc has few agreements with major economies and negotiations with the European Union have stalled. “An agreement with South Korea would be a strategic victory, providing some relief for the government of Brazil and the other countries in the bloc,” he says.

The reports are available at:

Global Value Chains and Implications for the Mercosur-Korea Trade Agreement
Mercosur-South Korea Trade Agreement: A Framework for an Innovative Proposal

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