| Brazilian President Luiz Inácio Lula da Silva | | | | addition of their nations as permanent members of |
| proposed the creation of a trilateral free trade | | | | the UN Security Council. |
| agreement (FTA) between India, South Africa, and | | | | "Let us join our voices to support UN reform," said |
| the nations of Mercosur at a reunion in Pretoria, | | | | President Lula, "The issue has been debated long |
| South Africa on Oct.17th. The proposed treaty would | | | | enough; the time has come to make decisions." The |
| create the largest free trade area in the world and | | | | president warned that without structural reforms the |
| could reduce these countries' dependence on | | | | UN risks losing global credibility. |
| developed nations. It would also create a strong | | | | The leaders also discussed the potential for IBSA to |
| political and economic block that intends to use its | | | | become a voice for other developing nations of the |
| influence to push for UN reforms and greater | | | | "South" against the industrialized nations of the |
| leverage during at World Trade Organization (WTO) | | | | "north." |
| talks. | | | | "These cooperation agreements have an impact on |
| The announcement came as a surprise in South | | | | the populations of the world's poorest countries," said |
| America where several regional FTAs are dying of | | | | Lula, "this will not only benefit our countries, it will |
| neglect. Mercosur itself has been unable to settle | | | | benefit all of humanity." |
| trade agreements within its own borders so far, nor | | | | What the announcement means for the Union of |
| with its proverbial neighbor the Andean Community | | | | South American Nations (Unasur) is unclear. It could |
| (CAN) next door. A total free trade area between | | | | be that Brazil is growing impatient with the slow |
| CAN and Mercosur was supposed to have occurred | | | | progress of the new union. The issues discussed |
| by 2002, tops, but worries about sensitive national | | | | today in South Africa are the same as those |
| markets resulted in an 80 percent FTA with the | | | | discussed at the Brazilian sponsored South American |
| remaining protections to be phased out by 2014. | | | | Reunion of Presidents in 2000. |
| However, with the support of Brazil, it may not | | | | Brazil's focus on changing developed nation's farm |
| matter whether the rest of Mercosur comes along or | | | | subsidies and the international status quo has driven |
| not. Brazil's population and economy dwarfs that of | | | | its interests within South America over the last |
| Argentina's, the second largest country in the block. | | | | decade, but with little or no progress on the regional |
| Brazil's 2006 GDP was over US$1, 067 billion | | | | front, Brazil seems to be seeking out more serious |
| compared to Argentina's GDP of US$214.3 billion. If | | | | partners abroad. |
| Mercosur is unable to agree on treaty conditions as a | | | | The announcement also complicates ongoing |
| group, Brazil could decide to go it alone, making the | | | | negotiations within the region by adding complexity |
| participation of the rest of Mercosur an added bonus, | | | | to an already difficult issue. CAN member countries |
| but not a necessary condition for the proposed | | | | like Ecuador, Bolivia, and Peru are hesitant about |
| treaty to succeed. | | | | FTAs with the larger Mercosur. Opening up the group |
| South African President Thabo Mbeki is expected to | | | | to emerging global powers like India and South Africa |
| invite the other nations of the South African | | | | could set the regional process back. |
| Customs Union (SACU) Botswana, Lesotho, | | | | Whatever the case, the proposed treaty is yet |
| Swaziland, and Namibia to join the group as well. If | | | | another example of the changing global landscape. |
| Lula is able to convince the rest of Mercosur and | | | | With just a little imagination one can picture a future |
| potentially all of South America, the customs union will | | | | world where current economic powers like the U.S. |
| have an enormous impact on global trade. | | | | and E.U. are forced to make tough concessions on |
| The treaty is not all about economics though. Brazilian | | | | national subsidies if they want to continue tapping the |
| President Lula and Indian Prime Minister Manmohan | | | | reserves of developing nations. Oh, the great age of |
| Singh both commented on the political potential of | | | | global decentralization has arrived. |
| the group to spur deep UN reforms, including the | | | | |