It was reduced from US$ 190 million in 2022 to - US$ 814 million in 2023.
On July 8, Bolivia achieved a goal that took nine years: its accession as a full member of the Southern Common Market (Mercosur). The applause came out. But there remain challenges on the horizon, in a bloc with which the trade balance is in the red.
Trade relations with Argentina, Brazil, Paraguay, Uruguay and Venezuela (the latter suspended since 2016) will gain new strength, however there is still much to do, since the last administration the trade balance with this bloc marked a drop of 528%: US$ 190 million in favor, to US$ 814 million against.
The Government of Luis Arce described the inclusion as a “historic milestone.” At the Mercosur summit in Paraguay, where the decision was made official, there was celebration. While the country's businessmen expressed their hope that Bolivia would become an "axis of articulation of the most important economic blocks in South America."
The expectations are not for less. Now including Bolivia, this regional commitment covers 14 million square kilometers of territory, a market of 315 million inhabitants, a Gross Domestic Product (GDP) that exceeds US$ 3 billion and annual exports of more than US$ 447,000 million.
DISPARATELY
The manager of the Bolivian Institute of Foreign Trade (IBCE), Gary Rodríguez, puts a cold shoulder to the issue. “In 1994 we had a strong discussion with Gonzalo Sánchez de Lozada and Foreign Ministry officials, determined for Bolivia to be a full member of Mercosur. We told them that the country was not prepared and that the result of an integration between disparate people would be negative,” he tells La Razón .
“But Goni's obstinacy and the bad advice from those around him prevailed, and progress was made towards a Free Trade Agreement. The result? What had been anticipated: without considering gas, between 1997 and 2023, Bolivia accumulated a trade deficit of US$ 43,000 million, so those who benefit from the national market are Brazilians, Argentines, Paraguayans and Uruguayans.
Taking into account the sale of Bolivian gas, the commercial relationship with the bloc shows a surplus of US$ 16,661 million from 1997 to 2023, with US$ 68,580 million in exports and US$ 51,919 million in imports, according to data prepared by the IBCE for La Razón , based on the National Statistics Institute (INE).
Although the export of hydrocarbons weighed in with positive numbers in the balance of the last six years (more data in the infographic), last year there was a worrying drop that has to do precisely with the lower income from gas: US$ 190 million in 2022 it went to -814 million in 2023, a drop of 528%.
Although Rodríguez notices this assessment. “First, to evaluate Bolivia-Mercosur trade, gas should not be considered, since it is not part of the Free Trade Agreement signed in 1996, since the export of gas to Argentina dates back to the 70s and to Brazil, from the beginning. from the 90s.
Second, even with the sale of gas, in 2023 we had a deficit of US$ 814 million with Mercosur, which demonstrates what has already been said, that, unfortunately, 'for Bolivia, Mercosur is gas and nothing more.'"
“Degassing” business between the country and the bloc, as Rodríguez warns, the statistics have been red since 1997 and have not fallen below the negative sum of US$ 2.5 billion since 2021 (more data in the infographic). The history indicates that the negative balance amounts to US$ 42,639 million, with US$ 51,904 million in imports and US$ 9,265 million in sales.
In the evaluation that takes into account the sale of hydrocarbons, the hardest fall occurs with Argentina. In 2022, exports reached US$1,744 million, but last year they decreased to US$954 million. And purchases also fell, from US$1,336 million to US$1,085 million, respectively. Of course, in the history since 1997 there is a surplus in favor of the country: with sales of US$ 2,433 million and imports of US$ 19,639 million, that is, US$ 2,794 million in favor.
Furthermore, sales also decreased between 2022 and 2023 with the other Mercosur nations: from US$ 1,893 million to US$ 1,569 million with Brazil, from US$ 65 million to US$ 47 million with Paraguay, and from US$ 19 million to US$ 16 million with Uruguay. However, with Venezuela, which is suspended from the bloc, there is a slight increase: from US$ 2 million to US$ 5 million.
According to IBCE data, last year the most exported product to Mercosur was gas, worth US$ 2,049.6 million, followed by soy products (US$ 177.9 million), urea ( US$ 72.1 million), bananas (US$ 44.2 million), sodium borates (US$ 28.2 million), liquefied petroleum gas (US$ 22.2 million), among the main ones.
On the other side of the coin, in terms of imports, diesel is in first place for US$ 591.6 million, followed by gasoline without tetraethyl lead (US$ 238.6 million), iron bars (US$ 85.9 million), preparations with an alcoholic level (US$ 70 million) and cars for transporting goods (US$ 44 million), at the top of the statistical table.
For the Government, joining this bloc opens up a range of opportunities for Bolivian products. “It is a great challenge and a great opportunity. Yes, we have muscles in some sectors such as the livestock sector, for example; It will be a great opportunity for the lithium sector when we begin to industrialize on a large scale,” said Vice Chancellor Elmer Catarina, without failing to mention Mutún iron.
OFFER
And Rodríguez once again exposes his critical position. “Many think that since Bolivia is a full member of Mercosur, that market will 'open' for our products, but that is not the case. Free trade with that bloc has been in force since 2014, after concluding the Trade Liberation Program, but it is not taken advantage of for two reasons: the Bolivian exportable supply coincides with that of Mercosur, which produces more competitively, and on the other hand, due to para-tariff barriers, mainly in Brazil and Argentina.”
For this reason, “fewer value-added products are exported today than when there was no free trade zone. What is coming now, in terms of opportunities and risks, has to do with free trade in the services sector, free movement of capital and people, harmonization of policies and having to be part of the Mercosur Customs Union which, As is known, it has a strong protectionist trait,” complements the IBCE manager.
There are other experts who point to non-immediate results. “The incorporation of Bolivia... constitutes one of the most important events in terms of long-term development options for the country,” says Horst Grebe, economist and columnist for La Razón, for whom “Bolivia has four years to adapt its laws and regulations to the regulatory framework” of this block.
The former minister poses challenges for the country in terms of institutional strengthening and professional training, for example, and in the business sector.
“To truly take advantage of the opportunities of belonging to Mercosur, the country will have to establish a very demanding catalog of changes in the orientations and approaches of its development. It is likely that such an effort is worth it,” he remarks in his column on Sunday the 14th.
STABILITY
As a boost to Arce's mandate and a sample of what can be built on this journey, Brazilian President Luiz Inácio Lula da Silva arrived in the country with his ministers and a group of businessmen to pave a “new era” in bilateral relations. , beyond the purchase and sale of gas.
And he asked to guarantee five types of stability to do business: political, economic, fiscal, legal and social.
Thus, it now remains for Bolivia to pave its way into Mercosur. What should you do in these four years? Rodríguez suggests learning from what has been done and preparing to compete at a high level.
“Negotiate in the best terms the incorporation of the great regulatory acquis of said bloc, so that in the next four years we prepare ourselves, both institutionally in the public sector, as well as in the services sector, to avoid repeating the sad history of free trade in tangible goods that is benefiting mainly Brazil and Argentina, although also Paraguay and Uruguay, and, without including gas, with all of them we have a structural deficit.
“The lesson learned is that, when a country begins to compete with others under inferior conditions, for example, without our producers being allowed to apply biotechnology, such integration is naive, because it will lose. The second would have to do with improving things at home, since if, for example, we are going to talk about free transit to be a “hinge” between Mercosur and the Andean Community, first we will have to end the unbearable blockades in the country. ”.
