Don't Underestimate The Upside Of EU-Mercosur Trade Pact

The EU-Mercosur free trade agreement will likely force economies like those of Brazil and Argentina, to modernize and ditch the last vestiges of protectionism.

The Mercosur bloc broke with its tradition by signing an Association Agreement with the EU
The Mercosur bloc broke with its tradition by signing an Association Agreement with the EU
Marcelo Elizondo


BUENOS AIRES — The world economy is supposedly "closing up." Yet global exports of goods and services in 2018 exceeded $25 trillion, a record in nominal terms. The figure represents 29.5% of the gross planetary product. Indeed private studies suggest the figure doesn't even include an additional $8 trillion worth of intangible trading in information (knowledge, date, etc.), which flowed without payment across countries, as part of international value chains.

Half of this commercial flow happens between countries that have signed agreements to open their respective markets, with some 300 treaties currently in force.

In this framework the strategic Association Agreement recently signed between the European Union and South America's Mercosur bloc is on the one hand part of a consistent EU policy (similar to those signed in recent months with Canada and Japan), and a departure for Mercosur in creating institutional links with states beyond the region.

It will mean an overhaul of Mercosur's currently very limited trade with other continents. In 2018, Argentina was 15th on a list of countries with the worst exports to GDP ratio (14.4%), with Brazil in 18th position (14.8%). Mercosur has an exports-to-GDP ratio of less than 15%, which is half the world average and considerably below Latin America's overall ratio of 23%.

This weakness is to a large extent due to internal problems, which in Argentina's case are macroeconomic imbalances, restrictive regulations, mesoeconomic shortcomings and firms' relative lack of international strategies. And while an international pact alone will not resolve such problems, many of our negative results are due to the absence of reciprocal pacts to open markets between this and other regions.

More open economies have lower jobless rates.

As Mercosur is a block with few members (four, compared to the more typical 13 for other groupings), trade inside the region is limited (20% of its total trade in contrast with 65% for the EU), so easing outside trade was required. Countries that generate more international trade benefit from five effects: they improve their production characteristics in goods and services (for increased competition), raise the quality of jobs (foreign firms favor formal contracts and invest in staff), boost investment rates (for having access to markets), reduce currency exchange volatility (because of access to trade or investment dollars) and strengthen gross production (through more net exportation) and subsequent tax revenues.

Furthermore and in spite of contrary opinions, more open economies have lower jobless rates than closed economies, as seen in Latin America. Argentina and Brazil have the highest rates in the region (10% and 12% respectively), compared with more open economies like Chile (7%), Mexico (3.5%) and Peru (6%).

The said pact is no magic wand and will evidently demand corrections in policies and private strategies. But it appears to be a change of matrix for at least the Argentine economy, whose defects are related to a state of general closure entirely at odds with our globalized world.

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What It Means When The Jews Of Germany No Longer Feel Safe

A neo-Nazi has been buried in the former grave of a Jewish musicologist Max Friedlaender – not an oversight, but a deliberate provocation. This is just one more example of antisemitism on the rise in Germany, and society's inability to respond.

At a protest against antisemitism in Berlin

Eva Marie Kogel


BERLIN — If you want to check the state of your society, there's a simple test: as the U.S. High Commissioner for Germany, John Jay McCloy, said in 1949, the touchstone for a democracy is the well-being of Jews. This litmus test is still relevant today. And it seems Germany would not pass.

Incidents are piling up. Most recently, groups of neo-Nazis from across the country traveled to a church near Berlin for the funeral of a well-known far-right figure. He was buried in the former grave of Jewish musicologist Max Friedlaender, a gravesite chosen deliberately by the right-wing extremists.

The incident at the cemetery

They intentionally chose a Jewish grave as an act of provocation, trying to gain maximum publicity for this act of desecration. And the cemetery authorities at the graveyard in Stahnsdorf fell for it. The church issued an immediate apology, calling it a "terrible mistake" and saying they "must immediately see whether and what we can undo."

There are so many incidents that get little to no media attention.

It's unfathomable that this burial was allowed to take place at all, but now the cemetery authorities need to make a decision quickly about how to put things right. Otherwise, the grave may well become a pilgrimage site for Holocaust deniers and antisemites.

The incident has garnered attention in the international press and it will live long in the memory. Like the case of singer-songwriter Gil Ofarim, who recently claimed he was subjected to antisemitic abuse at a hotel in Leipzig. Details of the crime are still being investigated. But there are so many other incidents that get little to no media attention.

Photo of the grave of Jewish musicologist Max Friedlaender

The grave of Jewish musicologist Max Friedlaender

Jens Kalaene/dpa/ZUMA

Crimes against Jews are rising

Across all parts of society, antisemitism is on the rise. Until a few years ago, Jewish life was seen as an accepted part of German society. Since the attack on the synagogue in Halle in 2019, the picture has changed: it was a bitter reminder that right-wing terror against Jewish people has a long, unbroken history in Germany.

Stories have abounded about the coronavirus crisis being a Jewish conspiracy; meanwhile, Muslim antisemitism is becoming louder and more forceful. The anti-Israel boycott movement BDS rears its head in every debate on antisemitism, just as left-wing or post-colonial thinking are part of every discussion.

Jewish life needs to be allowed to step out of the shadows.

Since 2015, the number of antisemitic crimes recorded has risen by about a third, to 2,350. But victims only report around 20% of cases. Some choose not to because they've had bad experiences with the police, others because they're afraid of the perpetrators, and still others because they just want to put it behind them. Victims clearly hold out little hope of useful reaction from the state – so crimes go unreported.

And the reality of Jewish life in Germany is a dark one. Sociologists say that Jewish children are living out their "identity under siege." What impact does it have on them when they can only go to nursery under police protection? Or when they hear Holocaust jokes at school?

Germany needs to take its antisemitism seriously

This shows that the country of commemorative services and "stumbling blocks" placed in sidewalks as a memorial to victims of the Nazis has lost its moral compass. To make it point true north again, antisemitism needs to be documented from the perspective of those affected, making it visible to the non-Jewish population. And Jewish life needs to be allowed to step out of the shadows.

That is the first thing. The second is that we need to talk about specifically German forms of antisemitism. For example, the fact that in no other EU country are Jewish people so often confronted about the Israeli government's policies (according to a survey, 41% of German Jews have experienced this, while the EU average is 28%). Projecting the old antisemitism onto the state of Israel offers people a more comfortable target for their arguments.

Our society needs to have more conversations about antisemitism. The test of German democracy, as McCloy called it, starts with taking these concerns seriously and talking about them. We need to have these conversations because it affects all of us. It's about saving our democracy. Before it's too late.

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