Canada-MERCOSUR Exploratory Trade Discussions
On June 24, 2011, Ed Fast, Minister of International Trade, announced that Canada and MERCOSUR were moving forward with exploratory discussions to enhance their trade relationship.
The first exploratory meeting was held May 31 and June 1, 2011 in Ottawa and a second October 4 to 6, 2011 in Montevideo, Uruguay. A third exploratory meeting was held May 7-9 2012 in Ottawa. Both parties are committed to exploring all areas in an effort to identify those where there might be common ground. The objective of these discussions is to enhance our bilateral commercial relationship and to open new opportunities in each other’s markets. Uruguay is current pro tempore chair of MERCOSUR until the end of June 2013. Uruguay will be followed by Venezuela for a six month term until December 2013.
MERCOSUR, also known as the Southern Cone Common Market, is a customs union established by Argentina, Brazil, Paraguay and Uruguay in 1991. This regional bloc represents a significant economic presence in Latin America. In 2010, the five members of MERCOSUR had a combined GDP of $3.3 trillion and a population of about 278.2 million.
In 2012, bilateral merchandise trade between Canada and MERCOSUR reached nearly $10.2 billion, representing an increase of 33.9% since 2006. Canadian merchandise exports totalled close to $4.1 billion in 2012, with 98% accounted for by exports to Brazil and Argentina (82.0% and 14.3%, respectively). Leading exports included fertilizers, machinery, mineral fuels and oils, paper and paperboard and cereal. Canada’s imports from MERCOSUR totalled approximately $6.5 billion in 2012. More than 98% of Canada’s 2012 imports from MERCOSUR members originated in Brazil (61.4%) and Argentina (33.9%). Leading imports included precious stones and metals, mineral fuels and oils, inorganic chemicals, sugar and machinery.
In 2010, Brazil made up the largest share of Canadian services exports to MERCOSUR countries, totalling $437 million, with exports to Venezuela and Argentina following at $106 million and $82 million, respectively (services export data for Paraguay and Uruguay is unavailable).
At the end of 2011, stocks of Canadian Foreign Direct Investment to MERCOSUR totalled over $13.8 billion (approximately $9.8 billion in Brazil, $2.7 billion in Argentina, $687 million in Venezuela, and $605 million in Uruguay). In 2011, Foreign Direct Investment in Canada amounted to $19 million from Argentina and $18.6 billion from Brazil (investment data for Paraguay, Uruguay, and Venezuela is unavailable).
Canada has Foreign Investment Promotion and Protection Agreements with Argentina (1993) and Uruguay (1999), and Venezuela (1998). In 2011, Canada and Brazil signed a bilateral Air Transport Agreement, a Social Security Agreement, as well as Memoranda of Understanding on Olympic Games Cooperation and on International Development Aid Effectiveness. Canada and Brazil also have a Science and Technology Cooperation Agreement, which was signed in November of 2008.
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