Trade Triangulation: The Stalemate of the FTAA and EU-MERCOSUR FTA Negotiations

Genna, Gaspare M. (2007) Trade Triangulation: The Stalemate of the FTAA and EU-MERCOSUR FTA Negotiations. In European Union Studies Association (EUSA) > Biennial Conference > 2007 (10th), May 17-19, 2007, pages 47, Montreal, Canada.

Abstract

Why are some free trade agreements (FTAs) in the western hemisphere successfully negotiated and implemented while others seem to stagnate during negotiations? FTAs develop when there is an asymmetrical power relationship and potential partners are satisfied with potential trade patterns. The European Union (EU) and United States have been successful in negotiating agreements with the Caribbean and Central American countries. However, current bilateral and multilateral trade talks between the EU, the Common Market of the South (MERCOSUR), and US are at a standstill. Trade patterns are unsatisfactory for the MERCOSUR members because they are not able to maximize their comparative advantage. Additionally, neither the EU nor US are willing to use their power capabilities to reduce this dissatisfaction. Finally, the growing Chinese economic profile in Latin America further complicates the ability for the three actors to achieve a set of satisfactory trade relations. Evidence to support these arguments comes from archival research of the failed EU-MERCOSUR FTA and Free Trade Agreement of the Americas negotiations.