China’s South America free-trade deal to have ‘clear impact’, but may irk US by seeking opportunities in its ‘backyard’

A proposed free-trade agreement between China and a group of South American nations, which includes Argentina and Brazil, will benefit all sides economically, but will further increase competition between Washington and Beijing in the so-called backyard of the United States, according to analysts.

New leftist Brazilian President Luiz Inacio Lula da Silva said that the proposed deal between China and the Southern Common Market (Mercosur), which also includes Uruguay and Paraguay as full members, will modernise and open up the South American trade bloc to other regions.

A possible agreement can be discussed after a similar free-trade agreement (FTA) with the European Union is finalised, added Lula, who returned for a third term as president in January.

“The unilateralism and hegemonism of the US contradict with the multilateralism and an open regionalism of Mercosur, including those in Latin America and Caribbean,” said Xie Wenze, a professor with the Chinese Academy of Social Sciences’ Institute of Latin American Studies.

It is clear that in recent years China’s economic presence on the continent has grown remarkably, and therefore it is natural that opportunities such as the signing of FTAs begin to emerge