Might Bolivia Join Mercosur? What To Expect

Bolivia's accession to the South American trade bloc Mercosur was approved by the Brazilian Senate on 29 November 2023, with the country becoming a full member on 8 July 2024. Bolivia's membership had been in negotiation since June 2011, with concerns over the solidity of the country's democratic institutions causing delays. Bolivia is the fifth full member of Mercosur, joining Argentina, Brazil, Paraguay, and Uruguay. Venezuela was also a full member but has been suspended since 2016.

Bolivia's full membership was approved by the Brazilian Senate in November 2023

Bolivia's full membership of Mercosur was approved by the Brazilian Senate in November 2023. This was the final step in the external ratification process, with Argentina, Uruguay, and Paraguay having already approved Bolivia's membership. Bolivia's internal ratification process was completed in July 2024, and the country officially joined the economic bloc.

Bolivia's membership of Mercosur has been a long time coming. The country first signed an accession protocol to join the bloc in 2012, and the process has been ongoing since 2011. Bolivia's membership was complicated by objections from Paraguay, which argued that the protocol was agreed upon while it was suspended from the organization. An amended protocol was agreed upon in 2015, and Brazil's ratification in November 2023 was the final step in the external ratification process.

Mercosur is a South American trade bloc established by the Treaty of Asunción in 1991 and the Protocol of Ouro Preto in 1994. Its full members are Argentina, Bolivia, Brazil, Paraguay, and Uruguay, with Venezuela having been suspended since 2016. The bloc's purpose is to promote free trade and the fluid movement of goods, people, and currency. Bolivia's membership of Mercosur is expected to bring new capital to the country and accelerate economic diversification. However, there are also concerns about the potential negative consequences of membership, including the high costs of imports from other continents and the imposition of a Common External Tariff.

Bolivia's internal ratification process was completed in July 2024

Bolivia's full membership in Mercosur has been a lengthy process, spanning eight years. One of the primary factors delaying its admission was the concern over the solidity of the country's democratic institutions. However, with the necessary ratifications in place, Bolivia is now poised to join the trade bloc as its fifth full member.

As a member of Mercosur, Bolivia will be required to adhere to the bloc's rules and regulations, including the adoption of the Common External Tariff (CET) and the Mercosur Common Nomenclature. This will impact the country's imports from other continents and its trade relations with neighbouring countries. Bolivia's affiliation with Mercosur also raises questions about the potential impact on its productive sector and the challenge of competing with its giant neighbours.

The ratification of Bolivia's membership by the Brazilian Senate highlighted the potential benefits for Brazilian companies, particularly in terms of accessing new markets and utilising cheaper energy sources. Bolivia's natural gas, lithium, and other strategic mineral reserves are particularly appealing to Brazilian interests.

In conclusion, Bolivia's internal ratification process being completed in July 2024 marks a significant step towards its full integration into the Mercosur trade bloc. This development holds the promise of enhanced regional cooperation and economic opportunities for both Bolivia and its partner nations, particularly Brazil. However, there are also challenges and uncertainties that Bolivia will need to navigate as it joins this economic alliance.

Bolivia's membership was delayed by concerns over the solidity of its democratic institutions

Bolivia's membership of Mercosur was delayed by concerns over the stability of its democratic institutions. Bolivia has a history of political instability, with a past marked by military coups and counter-coups, and the influence of caudillos (local strongmen). Despite transitioning to democracy in 1982, historic problems of poverty, social inequality, and the marginalization of Indigenous and Afro-Bolivian populations remained unresolved.

In 2006, Evo Morales became the first Indigenous president of Bolivia and facilitated structural reforms aimed at achieving racial equality, including a new constitution in 2009 that created a 'plurinational state', recognizing the country's diversity and its 36 different Indigenous peoples. However, some of Bolivia's Indigenous peoples continue to be marginalized and particularly impacted by the exploitation of natural and mineral resources in the regions in which they live.

Under Morales, state control of the economy deepened, and executive power was concentrated, undermining checks on presidential power. After serious irregularities during the 2019 elections, Morales resigned and left the country. A period of crisis followed, marked by protests for and against the government, resulting in dozens of deaths and hundreds of injuries. Despite a credible 2020 election, criminal proceedings against opposition members and restrictions on the media continue.

Bolivia's full membership of Mercosur was approved by the Brazilian Senate on November 29, 2023, with the vote on Bolivia's accession expected to be formally concluded on December 7, 2023. However, concerns about the solidity of Bolivia's democratic institutions had long delayed its admission to the trade bloc. Bolivia's membership of Mercosur had been eight years in the making.

Bolivia's poor deforestation record could hinder future EU-Mercosur talks

Bolivia has been approved for full membership of the South American trade bloc Mercosur, joining Argentina, Brazil, Paraguay, and Uruguay. However, critics have warned that Bolivia's poor deforestation record could hinder future EU-Mercosur talks.

Bolivia's deforestation rates have increased by 259% over the last eight years, driven primarily by agricultural expansion. In 2022, the country lost almost 596,000 hectares of forest, with the third-highest rate of primary forest loss globally, behind Brazil and the Democratic Republic of Congo. This trend has continued into 2023, with Bolivia losing more primary forest than any previous year on record. The agricultural industry, centered in the politically conservative province of Santa Cruz, is the leading driver of deforestation in Bolivia.

The Bolivian government has encouraged the expansion of soy plantations to meet growing export demand, creating a more favorable regulatory framework. It has increased soy export quotas and changed land assignments to allow agriculture in certain forest areas. Additionally, the government has granted increasing numbers of permits for deforestation and rarely penalizes illegal deforestation. As a result, almost three-quarters of recent deforestation has occurred in Santa Cruz, threatening the rich biodiversity of the Chiquitano dry forest.

Bolivia's poor deforestation record could complicate future trade negotiations with the EU, which has expressed concerns about the destruction of the Amazon rainforest. In contrast, land-locked Bolivia has flown under the radar due to its low exports to the EU. However, with Mercosur seeking a free trade agreement with the EU, Bolivia's environmental practices may come under greater scrutiny.

To address deforestation, Bolivia will need to introduce an effective land-use governance system, establish due diligence requirements for soy traders, and ensure that policies on biofuels do not lead to further deforestation. Without concerted action, Bolivia risks losing another 10% of its forests by 2035, jeopardizing its participation in future trade agreements.

Bolivia's membership will open or expand the market for Brazilian companies

Bolivia's membership in Mercosur will open up and expand the market for Brazilian companies. Bolivia's full membership in the South American trade bloc was approved by the Brazilian Senate in November 2023, with the vote expected to be formally concluded during a regional summit in Rio de Janeiro in December 2023.

The inclusion of Bolivia in Mercosur will establish new markets for Brazilian companies, as highlighted by senators in Brazil. Bolivia possesses relevant reserves of natural gas, lithium, and other strategic minerals that will benefit Brazilian companies. The expansion of Mercosur will also boost regional integration and enhance Brazil's economic opportunities within the bloc.

The Southern Common Market, commonly known as Mercosur, is a trade alliance established by the Treaty of Asunción in 1991 and the Protocol of Ouro Preto in 1994. It aims to promote free trade and the fluid movement of goods, people, and currency among its members. As of 2024, the full members of Mercosur include Argentina, Bolivia, Brazil, Paraguay, and Uruguay, with Venezuela currently suspended.

The addition of Bolivia to Mercosur will provide Brazilian companies with access to new markets and resources, particularly in the areas of natural gas, lithium, and strategic minerals. This expansion aligns with Brazil's goal of finding new markets for its products within the trade bloc. Furthermore, the inclusion of Bolivia strengthens the regional integration efforts of Mercosur, fostering economic cooperation and development among its members.

Brazilian companies will be able to explore business opportunities in Bolivia, contributing to the expansion of their operations and potentially increasing their market share in South America. The establishment of new markets and the availability of strategic resources will enable Brazilian companies to diversify their offerings and expand their customer base. This will create a more dynamic and competitive business environment within Mercosur, benefiting both Brazilian companies and the overall regional economy.

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