Mauricio Cardenas

South America: Brazil v. everyone else?

On Sunday, Alan Garcia, the president of Peru, said that his country, along with Colombia, Chile and Mexico would form a new regional economic bloc.

Garcia said the presidents of all four countries would meet in Lima on May 2 to hammer out the final details and make the formal announcement.

But all four countries - which have market-oriented economic priorities - already have individual free trade agreements amongst themselves. The stock markets of Colombia, Peru and Chile were even recently integrated.

There are currently no major barriers to free trade between them.

So what is the point of a formal economic block?

The point is simple: Brazil.