The Suspension of Venezuela from Mercosur: Economic and Political Impacts for Brazil

Abstract

Venezuela's entry into Mercosur (the Common Market of the South) in 2012 represented an opportunity for a nexus
between the Amazon Basin, the River Plate Basin and between the different cooperation projects that exist among them.
This movement could, therefore, serve as an impetus for regional development through economic, political, energy and
security integration. However, in 2017 the Andean country was suspended from the bloc. This paper aims to identify the
main economic and political impacts of this suspension for Brazil. A causal hypothesis testing methodology is used through
primary data collection and a specialized literature review is also done to answer: what are the economic and political
impacts, for Brazil, of Venezuela's suspension from Mercosur? The hypothesis is that Venezuela's suspension from Mercosur
has deteriorated bilateral trade with Brazil; the possibility of economic integration between the northern and southern
regions of the continent and consequently, stability and regional development. The hypothesis has only been partially
proven. The negative effects mentioned were detected during the period under review. However, the Andean country had
not carried out its economic and political integration when it was suspended from the bloc. Thus, its suspension was not
the cause of these problems, but only an aggravating element of these economic and political impacts that mostly arise
from its internal political and economic crisis and the posture of Brazilian alignment with other countries, to the detriment
of autonomous regional development. In other words, Venezuela's suspension of Mercosur was configured as an intervening
variable in the impacts analyzed.