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MERCOSUR and the Brazilian Leadership Challenge in the Era of Chinese Growth: A Uruguayan Foreign Policy Perspective

Abstract In recent years, China has expanded its presence in Latin America leading to increased trade flows, foreign direct investment, and bilateral cooperation agreements. At the same time, Brazil has attempted to emerge as a global player from its belief in itself as a regional leader. While both countries are part of the emerging South, they are also competing for influence in the South American area. We hypothesize that for MERCOSUR members, deepening commercial ties with China would be a viable option to counterbalance Brazil’s regional leadership, using Uruguayan legislators preferences as a tool for our study. Using logistic models, we conclude that that the probability of supporting a hypothetical free trade agreement with China is larger when politicians viewed MERCOSUR as an obstacle to the interests of his or her country and when he or she had doubts about Brazilian de facto regional leadership. This empirical evidence allows us to reflect on the political consequences of free trade agreements, on Brazil’s leadership in South America, and Brazil-China relations from the perspective of South-South relations in general.