This year the countries of the Southern Common Market (MERCOSUR) celebrate thirty years since its creation with the signing of the Treaty of Asuncion in 1991 by Argentina, Brazil, Paraguay and Uruguay. The bloc is a historic achievement in the region and one of the major milestones in Latin American economic integration, which was intended to overcome the previous logic of rivalry between the countries and establish a dynamic of cooperation.
With a population of almost 300 million and an area of about 15 million square kilometres (50 % larger than the European continent and almost as large as Russia), MERCOSUR is known for its great natural resources and potential for food production. The bloc exports 63 % of the world’s soy and is the largest global exporter of beef, chicken, corn, coffee and iron, as well as the eighth largest global automobile producer. Based on its GDP, which in 2019 reached USD 4.467 trillion (measured by purchasing power parity), the bloc is the world’s fifth largest economy.
First, in 1991, we created a free-trade zone so that our goods and services could move without restrictions, as well as a common external tariff so that we could manage exchanges with the rest of the world. This allowed for great expansion in our mutual trade. We were also able to promote the exchange of added-value products among the four member countries, which allowed for the stimulation of non-traditional export activities which create high added-value jobs (in the biofuel, chemical and petrochemical, plastics, pharmaceutical product, steel and automotive sectors, among others). Therefore, whereas MERCOSUR is a traditional and well-known exporter of primary products, many of the products traded between members of the bloc are industrialized products, among which automobiles, for example, stand out (representing almost 50 % of the total products traded between Argentina and Brazil).
In 2004 we created the Structural Convergence Fund of MERCOSUR, through which more than USD 1billion has been allocated to non-refundable loans for infrastructure and productive development projects, among others, which has allowed us to enhance the competitiveness of our economies, especially in the less developed areas of the region.
Since its first years, MERCOSUR has negotiated and signed trade agreements with most of the countries in Latin America, which allowed for a free-trade zone that comprises most of the region. We have also negotiated trade agreements with the European Union, EFTA, Israel, Egypt, India and the countries in the south of Africa, among others. MERCOSUR is a platform created for our countries to be open to the rest of the world in order to boost foreign trade.
Although the explicit goals of MERCOSUR upon its foundation were of an economic and commercial nature, the bloc plays an important role in the consolidation of democracy and the avoidance of conflict. Peace is a necessary condition for development, and regional integration has historically been a key instrument for consolidating our region as an area of peace and cooperation, without armed conflicts.
Cooperation within MERCOSUR covers many areas: culture, education, science and technology, the development of a common citizenship, the coordination of social and economic policies, etc. There are several and varied areas of joint work within the bloc, and they change as necessary, as the international context and the context of our countries change. For instance, in public health coordination between our countries has always been important, especially during the ongoing COVID-19 pandemic
Obviously, despite all the achievements in its three decades of history, there are still challenges ahead. Therefore, our strategic agenda makes us work to frame common and coordinated policies on productive development, increase our capacity to produce goods and services, create economies of scale and economies of specialization, as well as enter global value chains and attract global investment flows in a more intelligent manner.
In addition, MERCOSUR has a significant role to play in the international arena. Within the G20, the WTO, FAO and other international organizations, the unity of our countries helps us defend our positions on the global agenda. In an increasingly complex and fragmented global scenario, the coordination of positions enabled by MERCOSUR becomes increasingly important. Within multilateral organizations and in particular in the multilateral trade system, MERCOSUR and Australia share common interests and have a strong background of collaboration through the Cairns Group.
We believe that the purpose of integration is to reach agreements with due regard for the diversity of our countries, driven by the political will to achieve integration. MERCOSUR promotes supportive political, economic and social regionalism, because we know that facing difficulties together makes us stronger.
MERCOSUR is the most important foreign policy instrument of the last thirty years for our countries. It is ultimately a State policy which has remained constant in spite of changes of government. Throughout the last thirty years, we have achieved a great deal of common ground: a commitment to democracy as an essential condition for the lives of our peoples; respect for human rights as an essential and inalienable value for coexistence; the acknowledgement of our diversity; and the coordination of our economic growth policies in order to combine our productive structures.
The world is undergoing a reconfiguration of the global power structure, as well as a crisis of the international institutions that have governed us during the last seventy years. Given the challenges and uncertainties arising from this context, we are certain that the integration of our countries will continue to be the best way to boost our development, preserve our sovereignty, promote the well-being of our peoples and be integrated into the world.
Argentine Minister of Foreign Affairs,
International Trade and Worship
March 2021 ALABC E-Newsletter
Dear Members and Friends,
Welcome to our March 2021 Newsletter.
At ALABC, we are very positive and optimistic about what is in store for 2021. We continue to deliver important webinars and in-person-events to raise awareness for the Latin American region. In this edition, we are publishing the confirmed list of upcoming events.
Australian and Latin American business relations are guaranteed to continue to thrive, creating many business openings and connections for our members. Building on initial discussions between Latin American and Australian business leaders, throughout 2021, ALABC will produce strategic insights, curate business opportunities, facilitate match-making and networking for our members to access the opportunities and key contacts in government and industry.
I am very pleased to report that we will have the privilege of hosting the CEO of Nestle Australia, Sandra Martinez, as our guest of honour and keynote speaker at our first Annual Dinner in Sydney, to be held at the Royal Automobile Club of Australia on Thursday 27th May 2021. Sandra was born and raised in Ecuador and she is an inspiring Latin American business leader, a champion in the combat against climate change, shared value and sustainability.
We are also happy to welcome the new Trade Commissioner of Brazil in Australia Ms Helena Massote de Moura e Souza. ALABC is looking forward to working with Helena to unlock the growing business opportunities with Brazil. Did you know that Brazil is the fourth country for international students in Australia?. By 2020, Brazil will be in the top 10 economies of the world.
Due to an upgrade in our communications system, please update our telephone number in your database to 0481 999 217. You can also still reach us on the number 1 300 0 ALABC.
Please do not hesitate to contact me if you would like to discuss how we can support your business growth between Australia and Latin America.
Chief Executive Officer
Australia-Latin America Business Council
Read full newsletter here.
There is a tiny isthmus (narrow strip of land with sea on either side, forming a link between two larger areas of land) lying between the Pacific and Atlantic Oceans connecting North and South America called the Isthmus of Panama..
This isthmus is of strategic importance to global trade and the world of shipping because it contains the country of Panama and the Panama Canal..
Panama is home to the largest ship registry in the world, whereas the Panama Canal is of huge significance to the shipping industry..
Read full article here.
This week, Latin American policymakers presented road maps to a low-carbon economic recovery in two different international forums. Costa Rica, for its part, aims to build nodes for different green jobs across the country. These will be meticulously planned according to such factors as energy demand and wind speed, as detailed by a senior official at a United Nations sustainable development forum.
At the Inter-American Development Bank (IDB) annual assembly, Colombian officials mentioned their five-year stimulus plan, which likewise aims to create 114,300 green jobs. “Colombia today is the Latin American country that is leading the energy transition,” said President Iván Duque, adding that the country recently pledged to reduce its greenhouse gas emissions by 51 percent by 2030.
In Latin America, as elsewhere in the world, political leaders are at least paying lip service to making their post-coronavirus economies more sustainable. Preliminary reports on the makeup of stimulus packages around the region suggest that a few are even taking concrete steps toward green job creation. On balance, though, they could do far better.
Vivid Economics’ Greenness of Stimulus Index identified new sustainable investments such as green infrastructure in Argentina, Brazil, Colombia, and Mexico; conservation programs in Colombia; and subsidies for green products in Brazil. Still, each of those four countries earned aggregate negative scores in the index: They have also pumped money toward environmentally harmful products and infrastructure investments, and eased some environmental standards.
A U.N. Environment Program report that tracked recovery measures in the world’s 50 largest economies ranked Chile’s recovery spending the greenest in Latin America. The Chilean government says it is committing at least $1.3 billion to environmentally friendly measures such as installing electric bus terminals and retrofitting public buildings.
Read full article here.
Last week, several green hydrogen projects were announced in Latin America. AES Gener wants to set up a hydrogen production facility in Chile that would require around 850 MW of renewable energy capacity. The Uruguayan government is planning a tender for a pilot hydrogen project for sustainable mobility and the Mexican authorities are reviewing a large scale PV project planned to power a 75 MW hydrogen plant.
Last week, several large scale green hydrogen projects were announced in Latin America, including a US$5.4bn green hydrogen plant under development by Australia-based hydrogen specialist Enegix Energy–a project that is expected to require 3.6 GW of wind and solar facilities and is currently the region's largest hydrogen project.
Other developments announced simultaneously in other Latin American countries last week confirm that the region may become a global hydrogen hub thanks to its considerable solar resources, land availability, and low project costs, which also means the nascent hydrogen sector in the region may immediately gain in scale.
February 22 (Renewables Now) - Australian renewable energy company Enegix Energy will be part of a USD-5.4-billion (EUR 4.4bn) green hydrogen project in Brazil's Ceara state.
On Friday, the state government and the foreign firm signed a memorandum of understanding (MoU) for the project planned for the state's Pecem Industrial Complex Port. It is expected to be the first green hydrogen hub in Brazil and Latin America, the government said. Enegix Energy is to build the hydrogen production facility.
Thanks to the available port infrastructure, international partnerships and location, Ceara expects to be able to export hydrogen at a competitive price.
The government is also partnering with Pecem port, Ceara's industry federation Fiec and the state's federal university UFC. It has established a task force to enable the structuring of a green hydrogen production chain in the region.
Misguided energy policies threaten its manufacturing sector and the global fight against climate change.
The combustible engine’s end date is firming up: General Motors Co., the largest of the Detroit big three, plans to stop making gas-driven cars by 2035. The global green shift goes beyond vehicles, as hundreds of companies and a growing number of nations pledge to neutralize their carbon footprints. Mexico’s natural bounty in alternative energy sources and its close industrial ties to the United States give it advantages going into this new era. Yet Mexico’s government is squandering them by rejecting the green revolution just as it picks up its global pace.
Mexico’s manufacturing base rests heavily on autos. The factories of Ford Motor Co., GM, Nissan Motor Co., Volkswagen AG, Toyota Motor Co., and other companies fill its industrial heartland and churn out nearly 4 million vehicles a year, making Mexico the world’s sixth biggest producer. Global parts-makers have followed their clients: Aptiv Plc set up with GM, Visteon Corp trailed Ford, and Denso Corp came with Toyota. Mexico developed sophisticated homegrown suppliers, too: Brake and suspension maker Rassini SAB, chassis provider Metalsa SA, powertrain manufacturer Nemak SAB, as well as hundreds of smaller shops that make the basic nuts and bolts assembled into seats, dashboards, mechanical systems and more. The sector is now Mexico’s biggest export driver by far, bringing in $100 billion in annual revenue.
Should Latin American SMEs consider the possibility of exporting their products to Brazil? Yes, because Brazil is the largest market in the region with almost 200 million inhabitants and because in addition to being a member of the Mercosur it has trade agreements with several countries in the region such as Chile and Bolivia, facilitating the entry of products into its territory.
If this information has convinced you to face the challenge of exporting to the verdeamarelho country, then you should investigate the characteristics of the Brazilian market. Below we provide answers to your possible questions.
Chilean miner SQM plans to invest US$700mn in an Australian lithium project in 2021-25.
The project, known as Mt Holland, is a JV between SQM and Australia’s Wesfarmers, which will invest another US$700mn in the initiative.
The parties announced a final investment decision in disclosures on Wednesday.
According to an updated definitive feasibility study, initial concentrator and refinery production will be about 50,000t/y of battery grade lithium hydroxide. Environmental approval for the refinery is pending.
Construction is forecast to start in 2H21 and first production of lithium hydroxide is expected in 2H24, SQM said in a filing with Chile’s securities regulator CMF.
Read full article here
Perth-based retail and industrials conglomerate Wesfarmers has announced it will forge ahead with a near billion-dollar investment to construct a lithium mine in the Western Australian region of Mt Holland.
Wesfarmers told investors after market close on Wednesday evening it had made a final decision to proceed with the investment in the mine and its associated refinery in Kwinana which it is building via a joint agreement with Chilean chemical company Sociedad Química y Minera de Chile (SQM).
The two businesses’ joint venture company, Covalent Lithium, completed a fresh feasibility study on the mine, determining its annual production capacity of 50,000 tonnes of battery-grade lithium, a 5,000-tonne increase on the original planned production capacity.
Wesfarmers and SQM are currently in the process of landing all necessary approvals for the project though final approval is required from the Western Australian Environmental Protection Authority.
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