South American Trade Policies Reconsidered: The “Convergence While Diversity” Mantra

Abstract

South America is changing its trade policies in the quest of getting a more consistent and synergetic region and integrating more efficiently on global value chains. Thereby, trade issues are being addressed under the idea that is possible to converge throughout trade agreements or participation on common “institutional spaces” while keeping the regulatory margin of maneuver to implement different national policies. Also, that it is time for Mercosur to get flexible. This piece discusses those ideas by presenting the South American trade scenario, addressing the current situation of regional integration initiatives and negotiations underway; and, concluding with a reflection on such initiatives’ prospects, highlighting its implications in terms of trade governance institutions. The article finds that convergence between Mercosur and the Pacific Alliance may advance using their common ground and piling up initiatives with no great impact on trade and/or regulatory standards over its Member countries. In contrast, Mercosur flexibility, Mercosur negotiations with the European Union and the Pacific Alliance trade external policy, in particular the implementation of the Progressive TPP, might change Latin American trade landscape.