Mercosur is the largest trading bloc in South America. It was formed in 1991 by Argentina, Brazil, Paraguay, and Uruguay. Mercosur is known for its abundant natural resources, extensive land area, and favorable climate, which contribute significantly to its agricultural sector. Mercosur’s primary goal of promoting regional integration in South America has been pursued through trade agreements with neighboring countries. These agreements seek to reduce or eliminate tariff and non-tariff barriers within the bloc. By lowering barriers, these agreements can increase existing trade and encourage the exchange of less-traded goods. This study investigates the impact of Mercosur’s trade agreements with Chile (1996), Bolivia (1997), Peru (2005), and Colombia and Ecuador (2005) on the agricultural sector. We assess whether these agreements have expanded Mercosur’s agricultural exports and promoted diversification. We use a structural gravity model to analyze these outcomes, accounting for the phased implementation of each agreement. Our findings indicate that while trade agreements have significantly increased trade in manufacturing goods, their effect on agricultural trade has been minimal.
