MercoPress. South Atlantic News Agency

Intra-Mercosur trade experienced one of its worst years in 2009

Overall trade among Mercosur members in 2009 was back to 2007 levels

Trade among Mercosur members plummeted in 2009 under the effects of the international slowdown which severely limited access to financing and made credit in the region harder to obtain, according to a report from the Inter American Development bank, IDB.

Although trade contraction last year was global for Mercosur the loss was even greater than in the previous crisis at the end of the nineties when Asia, Russia and Brazil collapsed.

Mercosur total intra-trade in 2009 reached 28.9 billion US dollars which is almost identical to the numbers of 2007, 28.98 billion USD.

Exports to the rest of Mercosur from the largest Latinamerican economy, Brazil totalled 15.8 billion last year, while imports 13.1 billion USD, which represent a drop of 27.2% and 12.2% compared to 2008, a year when trade had actually increased 25.3% and 28.5% respectively over 2007
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Brazil represents 52% intra group exports and 34.9% of imports (2008 data). For Brazil, Mercosur is equivalent to 10.3% of its overall foreign trade.

However an interesting figure is that of Brazil’s trade surplus with its associates, which since 2004 has suffered a significant contraction (60%); in other words this means that Brazil was a kind of crisis shock absorber for the region.

In effect Brazilian sales to Mercosur fell 27.2% in 2009, a higher percentage than for the rest of the world, 22.2%.

A primary conclusion is that when Brazilian sales to the block increase, they grow at a faster rate than with the rest of the world, while in recession periods exports to Mercosur suffer abruptly and are lost at a higher percentage than when out of the region, points out the report.