By Dr Aprajita Kashyap
Bolivia’s potential accession to MERCOSUR (Southern Common Market) has been in the pipeline ever since it signed a protocol of accession to MERCOSUR in 2012. Bolivia has been an associated member of MERCOSUR since 1996. This status allows for partial integration and participation in some of the bloc’s activities but does not confer full membership rights and obligations. The process of full membership has been progressing, albeit slowly. Concerns over the state of the country’s democratic institutions may have been one possible reason for the delay. In December 2023, when the accession as a full member was concretised, Bolivian President Luis Arce expressed gratitude for the efforts of the Brazilian leader Lula. Arce went on to describe it as a historic milestone for his country in the face of global challenges
Mercosur, or the Southern Common Market, is an economic and political bloc that originally comprised Argentina, Brazil, Paraguay, and Uruguay. In its initial period of formulation, when the arch-rivals Argentina and Brazil were seeking to improve relations, the bloc saw some early successes, including a fivefold increase in trade within the group during the 1990s.
There are several implications of full membership. This would help to integrate Bolivia more deeply into MERCOSUR’s customs union, potentially increasing trade with member countries (Argentina, Brazil, Paraguay, and Uruguay). In terms of market access, Bolivian goods would benefit from reduced tariffs and fewer trade barriers within the bloc, promoting export growth. Increased Trade: Easier access to the larger markets of MERCOSUR countries could significantly boost Bolivia’s exports. The avenues for investment opportunities in Bolivia would widen since being part of a larger economic bloc could attract more foreign investment. The sequel to this natural integration could spur economic growth and development
The aspects of energy and natural resources would get a boost with Bolivia’s presence because of significant natural gas and lithium reserves that are of strategic importance. This would, therefore, enhance energy cooperation and investment in the sector.Additionally, concerning political and diplomatic regional Influence, joining MERCOSUR as a full member would strengthen Bolivia’s influence in regional politics and decision-making within the bloc. This would also signify a stronger commitment to South American integration and cooperation.
However, it will be preposterous to be gung-ho about the accession because challenges are bound to arise. Mercosur continues to face internal division. Lula’s desire to modernise the bloc, including by allowing for bilateral deals with third-party countries, had been opposed by former Argentine President Alberto Fernández. Fernández’s successor, Milei, has gone to the extent of threatening to withdraw Argentina from the bloc entirely. Uruguay’s ongoing efforts to ink an FTA with China have likewise created tension, and Bolivia’s recent accession while amid an economic crisis could add to the pressure. Moreover, the bloc’s protectionist policies and reluctance toward creating value-added supply chains or regional production hubs are stifling integration.
Within the bloc members, there are substantive economic disparities especially since Bolivia’s economy is smaller and less industrialized compared to other MERCOSUR members, which may pose challenges in contending within the bloc. For the ease of regulatory alignment, it is imperative for Bolivia to align its regulations and standards with those of MERCOSUR. It would necessitate significant technical and policy modifications within the domestic domain.
The upshot of full membership of Bolivia in MERCOSUR holds promise for greater economic integration, increased trade, and heightened Latin American regionalism. However, the foreseen challenges will need to be addressed by Bolivia to fully benefit from the opportunities presented by joining the bloc.
(The author is Faculty of Latin American Studies at CCUS&LAS, School of International Studies, JNU.)
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