MERCOSUR: AN ANALYSIS OF THE INFLUENCE OF BLOCK’S TRADE AGREEMENTS ON TRADE IN THE REGION

Countries have been increasingly integrating into their international trade relations and a large part of this integration is due to trade agreements that have become popular since the 1980s. Many regional blocs were formed during this period, with emphasis on the creation of Mercosur in 1991 by Argentina, Brazil, Paraguay, and Uruguay, the largest in South America. Although Mercosur has favored the trade of its members, it has been the target of several criticisms, especially those related to the effectiveness of the bloc and its agreements. The objective of this study is to measure the effect of Mercosur and the bloc’s agreements with Bolivia, Chile, Colombia, Ecuador, India, Israel, Mexico, Peru, SACU, and Venezuela, seeking to investigate whether these agreements are enabling and promoting trade. The analysis was based on a panel composed of 86 countries that trade with American countries, covering the period between 1980 and 2020. To achieve the proposed objectives, a structural version of the gravity model with fixed effects was used. The results found indicate the efficiency of only 22.22% of the commercial agreements analyzed in increasing trade in the region. It was also possible to verify that Paraguay and Uruguay are the countries in the bloc that benefit most from the trade agreements signed.

KEYWORDS:
Trade agreements; International trade; Mercosur; Gravity model