In the current favorable macroeconomic context the fiscal stance of MERCOSUR countries is no longer under strain. A series of research projects undertaken by MercoNet for Argentina, Brazil and Uruguay has concluded that fiscal sustainability has broadened pro-growth fiscal space. However, despite some progress towards the implementation of national counter-cyclical fiscal policies, this has not led to region-wide pro-growth fiscal policies.

This report takes on the potential gains and challenges faced by Latin America´s insertion in global services value chains, particularly in the healthcare, banking, research and development (R+D) and audiovisual services sectors. The report focuses on the specific cases of Argentina, Brazil and Mexico.

International trade was one of the main channels through which the international crisis ?which began in the United States in 2008 as a financial crisis?, spread towards Latin America. In 2009 world trade contracted and the demand for Latin American exports fell, leading the region to react through the adoption of restrictive trade policy measures to counteract the adverse effects of the crisis. Merconet research shows that the region has the opportunity to implement policies to mitigate the impacts of the crisis and boost intra-regional trade, as well as to increase coordination to make sure that national policy measures do not affect negatively other neighbors or regional trade partners.