Improving the Access of Mercosur's Agriculture Exports to United States: Lessons from NAFTA

Sep 2004
In the last 15 years or so Mercosur countries have implemented trade liberalization reforms both unilaterally and at regional level. These reforms have been successful in promoting overall trade flows, but not so much with respect to exports to developed countries. This is particularly the case with the United States (US) and the European Union (EU) markets. For example, in the case of Argentina, exports to the EU have increased only 20% between 1990-2000. Exports to US have grown at higher rates but still below those observed for the rest of the world. Why is it that Mercosur products have been unable to increase their access to these markets? One reason that clearly outstands is that these countries have developed a comparative advantage in agricultural (both primary and manufactured) products and these items have been the ones that faced the strongest protection in the central economies.