Scenario favors Mercosur-Korea agreement according to report

The new paradigm for global value chain organization, focused more on resilience to supply shocks and production redundancy, creates an opportunity for Mercosur and South Korea to reach a trade deal. The treaty can go beyond tariff issues, embracing non-tariff barriers, services, government procurement, and effective technical collaboration, establishing a bilateral fund to guarantee joint R&D projects in essential sectors.

These are some of the points in the reports elaborated by the Fundação Getúlio Vargas’ Center for International Prospecting and Intelligence (FGV NPII) and the Korea Foundation. Experts from South Korea and Mercosur gathered to present possible strategies and mechanisms to help make the trade agreement viable. In 2018, the agreement began to be formally designed. The most recent round of negotiations took place in September of last year.

The experts’ study, which included meetings and discussions with government leaders, gave birth to two reports. The first focuses on global value chains, while the second focuses on regulatory reforms.

Leonardo Paz Neves, a political scientist, and coordinator of the FGV research center, comments that the benefits of a deal between Mercosur and South Korea go beyond trade. In fact, a treaty such as this plays an important role given that the bloc has few agreements with economically relevant countries, and negotiations with the European Union have stalled.

According to Paz, the agreement with Korea can feature greater sophistication, embracing tariff and non-tariff barriers, services, intellectual property, and government procurement and tools capable of fostering technological cooperation. According to Paz, the Mercosur-Korea deal under negotiation already includes a chapter in this regard. The plan is to stitch this together by establishing a fund with resources from both parties for the development of R&D initiatives.

Source: Valor Econômico

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https://valor.globo.com/brasil/noticia/2022/02/18/cenario-favorece-acordo-mercosul-coreia-diz-relatorio.ghtml

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