Mercosur and Africa: the trading relationships


Mercosur and Africa: the trading relationships

Mercosur and Africa: the trading relationships

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Working Papers ~ Ron Sandrey

A decade ago the news that the four South American countries of Brazil, Argentina, Uruguay and Paraguay that make up the core group of Mercosur (in Spanish, Mercado Común del Sur) had signed a preferential trade agreement (PTA) with SACU was greeted with some enthusiasm in that it may advance the trading relationships between the two regional blocs. In reality some ten years on the agreement is still not in force, and indeed many at the time were sceptical of the agreement given its limited nature. The exclusion of the sensitive manufacturing products such as vehicles and electrical equipment and sugar and beef on the agricultural side highlights that the deal is largely political and symbolic on the trade side.

Meanwhile, South Africa’s economic and trading relationships with the BRICs (Brazil, Russia, India and China and more recently South Africa), China’s relationships with the continent of Africa and the integration of Africa itself into free trade areas such as the Tripartite FTA and the Continental FTA have moved to the forefront of public attention. For future trading relationships we also need to factor in global economy factors where economic growth in both China and Brazil is slowing. The growth rates in China during 2015 were the slowest for 25 years, and this combined with falling oil and commodity prices is creating global uncertainty. Similarly, the Brazilian economy shrank 4,5% year-on-year in the third quarter of 2015.

The objective of this paper is not so much to examine the political economy of the Mercosur – SACU PTA or even the BRICs or African integration but rather to examine the sometimes overlooked profile of trade between the core group of Mercosur and the continent of Africa. To do this we use trade data from the International Trade Centre (ITC) and report this trade from the African perspective.

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