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In this context, for the first time in MERCOSUR history, the region demonstrated a step ahead in the average value of its exports per capita, despite having the lowest-performing country ( IMF, 2014 ). Uruguay, Argentina, and Venezuela are currently in the process of a de-primarization, whereas Paraguay and Brazil follow a sustainable growth strategy.
The manufacturing structure of each country of MERCOSUR also impacts each other. During the XX century, several countries have already signed a preferential trade agreement with South America, following a rather similar pattern of import-substitution industrialization. Most of them have implemented a boom in the manufacturing sector, with Peru, Argentina, and Brazil leading the way. However, the recovery of manufacturing has been considerably different in each country. Argentina and Brazil developed a similar export potential, particularly in the automotive sector, due to having a large consumer base and a well-trained workforce. Paraguay, Venezuela, and Uruguay have higher levels of openness, since the first one had special relations with Venezuela, the second with South America, and the third has never closed the door to the rest of the world. In this sense, Brazilian businessmen must accept that the Argentinian and Paraguayan economies are more flexible than that of Brazil, and manufacturers in Venezuela have no reason to resist.
During the XX century, several countries have already signed a preferential trade agreement with South America, following a rather similar pattern of import-substitution industrialization. Among the most important trading partners in the region, there are Argentina, Brazil, Paraguay, and Uruguay. Each country has a manufacturing structure which impacts on each other. Argentina and Brazil have followed a similar path, particularly in the automotive sector, having a large consumer base and a well-trained workforce.
According to Bekerman and Rikap (2010 ) there are four main outcomes of an agreement based on MERCOSUR. First, two countries agree to grow in the same direction, and their relative markets expand. Second, they reach minimum size conditions, and thus their relative markets are smaller than those of the countries that do not participate in the agreement. Third, a member country experiences an increase in its relative market. Fourth, and finally, some countries decide to evolve in a different trajectory that separates them from the rest of the world, but they agree to maintain the same degree of dependence on the rest of the world.
After the 1990s, MERCOSUR began to suffer from a fast industrialization process that was probably a consequence of the reforms and the greater autonomy of the federal states. During the 2000s, MERCOSUR countries also reached important levels of trade with Brazil and the neighboring countries, particularly Argentina and Paraguay. However, Uruguay, which was one of the great beneficiaries of the regional integration process, lost its competitiveness during the 2008 crisis, which probably boosted the competitive advantages of the other countries that had been integrated to the MERCOSUR, mainly at the border of Brasil and Argentina. Today, MERCOSUR is confronting different categories of problems: the high external demand for its primary commodities, which is a constant in the world market; the emerging new markets like China and India, and new suppliers like Vietnam; and the unravelling of the centralized trade policy that had contributed to attain the convergence levels. The MERCOSUR trade policy still favors free trade, but it is less open than in other regional and international trade formats.
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