Abstract

The Mercosur trade alliance formed in 1991 is composed of six full member countries. Historically, Mercosur member countries have been engaged in international trade with the United States, Japan, and the European Union, but recently, China has become a dominant player in the region, with increased foreign direct investment and international trade. Chinese commercial and trade involvement was followed by a visit to the region by President Jiang Zemin in 2001; therefore, this study relied on a 2000–2015 data series. Chinese enterprises are competing well with U.S. corporations in almost all Mercosur member countries. A majority of Mercosur members had a trade deficit with China in recent years, suggesting that Mercosur members cannot leverage their export industries and are losing their competitiveness. The future of the Mercosur-China trade relationship is bright because both sides require each other’s products. Future involvement also depends on the Chinese government’s strategic goals, and the competitiveness of U.S. corporations.

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