Wen proposes free trade deal with South America

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Chinese Premier Wen Jiabao proposed a free trade deal between China and Mercosur,  the South American trade bloc, Monday during his trip to the region.

Chinese Premier Wen Jiabao (L Front) attends a video conference with leaders of the South American Common Market (Mercosur) including Argentine President Cristina Fernandez (R), Brazilian President Dilma Rousseff and Uruguayan President Jose Mujica, in Buenos Aires, capital of Argentina, June 25, 2012. (Xinhua/Yao Dawei) 

"We share extensive common interests and we have great potential for further cooperation, which will increase the power of developing countries," Wen said in Buenos Aires where he met Argentine President Cristina Fernandez and held a video conference with the presidents of Brazil and Uruguay.

"We should carry out feasibility studies on a free trade area between China and Mercosur," Wen said.

He also aimed to double the trade between China and the bloc to $200 billion in 2016 from the volume in 2011.

All the regional leaders agreed on the benefits of a trade pact.

Brazilian President Dilma Rousseff said that boosting relations can keep any contagion from the financial crisis at bay and stop it "provoking unwanted consequences in employment and incomes that would hurt economic growth".

Fernandez said increasing links between China and Mercosur will inject economic vitality into the member countries, and boost Mercosur's development.

Uruguayan President Jose Mujica highlighted the need for Mercosur to add value to exports of raw materials and create more jobs.

Mercosur, founded in 1991 and also known as the South American Common Market, is an economic and political agreement among Argentina, Brazil, Paraguay and Uruguay.

Trade links have boomed in the past decade between China and Mercosur as China emerged to become Mercosur's second-largest trade partner and export market.

The bloc is the major exporter of agricultural products, such as soybeans and meat, to China, with total trade between them reaching $100 billion in 2011.

Qi Fengtian, an expert on Latin American studies at the Chinese Academy of Social Sciences, said that free trade offers new opportunities, not just in financial terms.

"Considering the rising influence of Mercosur's member nations, I think cooperation with China will contribute more to a fair and rational international trade order," Qi added.

The proposed free trade deal could be discussed during Mercosur's meeting in Mendoza, Argentina, this week.

(China Daily contributed to the story)

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