Mexico Fills Void in South American Free Trade Agenda

Mexico Fills Void in South American Free Trade Agenda

When Mexico's secretary of foreign affairs, Patricia Espinosa, recently acknowledged that Brazil is dragging its feet on the free trade deal the two countries agreed to hash out last November, it was not the lament of an aggrieved party. After all, Mexico, Latin America's second-largest economy, is hardly a victim in its trade relations with Brazil, the region's largest. To the contrary: In the first seven months of 2011, Mexico registered a $478 million trade surplus with Brazil, a 24-fold increase over the $19 million registered during the same period in 2010.

That might explain Brazil's lack of enthusiasm for a trade agreement with Mexico. The limited attention that Brasilia has devoted to the negotiations is also understandable given the pressing issues that Brazilian President Dilma Rousseff is facing in her first year in office -- including an overvalued currency, rising inflation and corruption scandals. But it also signals a piecemeal approach to international relations that goes along with Brazil's newfound "BRIC mindset": Brazil no longer has much interest in merely regional issues, especially those that require sustained effort and yield only gradual payouts.

The Mexicans don't seem to be taking the slight personally. "Brazil currently has trade negotiations under way that date far back with many different countries. This makes us think that it's a country in which there isn't much flexibility for a negotiation," said Espinosa.

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