Latin America at a glance: June 2016

June 2016

During last May, discussions with the intension to revive the negotiations for a free trade agreement between the MERCOSUR countries and the EU took place in Brussels.
The European country members took different positions: Spain was strongly in favor but “France, however, is leading a rebellion of 13 countries, which complain that Brussels is rushing to make offers on quotas and other tariff concessions without calculating the effect exports from South America’s agricultural powerhouses would have on EU farmers”. Read article.
The Economist sees this agreement very critic stating that the “ Mercosur’s governments were also missing the trade boat”. As the negotiations between Mercosur and EU were initiated since 1999 and stopped by different reasons. The Free Trade agreement are for example not necessary welcome in the United States where Brazil’s now want to talk trade with. See article

BUENOS AIRES, May 6. The Argentinian President, Mauricio Macri, said that for 2016, it is expected a foreign investment of US 20.000 Mi. in the energy and agropecuary sectors. Source: Reuter

Lima, May 30. After a debate of the candidates for the presidency of Peru, Mrs. Keiko Fujimori (45,9%) has positioned herself as a favorite against Mr. Pedro Pablo Kuczynski (40,6%) . Source Reuters.

June 1st. American companies are leaving Venezuela as Fox news expressed ” In the past three weeks alone, Coca-Cola announced that it had to stop production in the South American country due to a scarcity of sugar, while Bridgestone, a tire company based in Tennessee, decided to sell their assets to local investors and Kimberly Clark, a paper product company based in Texas, reduced its production by 90 percent” see all article. Main reasons are country’s hyperinflation, no dollars available to import raw materials, currency exchange problems that are leading multinationals’ overall bad results affecting they stock value. Source: FoxNews.
May 28, Venezuela’s government extended by two weeks a decree reducing the public sector workweek to Mondays and Tuesdays in a bid to tackle the oil-rich country’s electricity crisis. The enforced leave was first announced in late April. See article .

As the Olympic Games are getting close, and open was sent to Dr. Margaret Chan, Director-General, World Health Organization [WHO] a letter was signed by 150 people identified as health experts. Stating ““An unnecessary risk is posed when 500,000 foreign tourists from all countries attend the Games, potentially acquire that strain, and return home to places where it can become endemic.” Read article
Last February, The IOC President Thomas Bach “The spread of the mosquito-borne virus across south America would not adversely affect the Games in Rio
According to the Financial Times: European companies currently pay about €4bn a year in tariff duties on their exports to Mercosur.
The EU runs an industrial surplus with Mercosur, exporting €47bn of goods and importing €23bn. source UNCTAD