3 Minerals fuels, lubricants and other connected articles – about 75% of exports to the world 6 Manufactured goods categorized mainly by material - about 10% of exports to the world 5 Chemicals and connected items - about 5% of exports to the world Products exported by Mercosur: 0 Food and live animals mainly for food – about 25% of exports to the world 7 Machinery and transport gear - about 19% of exports to the world 6 Manufactured goods categorized mainly by material - about 18% of exports to the world 2 Crude materials, inedible, other than fuels - about 15% of exports to the world.
Given that Venezuela has continued to export goods based on natural resources alone makes it quite appropriate for the Mercosur group, which hasn’t been dealing with this products until now. The particular specializations of Mercosur and Venezuela on different sectors of industry make them good partners and ensure that there will be both economic and industrial exchanges at various levels. Also, given the asymmetry and thereby the imperfect competition in the Mercosur Venezuela (which is still not a forerunner as far as industrial produce goes) will be pushed to its limit to make a mark and live up to its full potential.
In order to survive and do well for itself in the Mercosur Venezuela will have to greatly improve its competency. This urge to do well and compete with others has often been known to bring about a dramatic change in the economies of countries far weaker than Venezuela. On the whole therefore being a part of Mercosur can bring about some serious changes in Venezuela. The kind of changes these will be depended entirely on the Venezuelan economy itself. (Lamb, 2006) The case in Hand
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For a small but steadily growing establishment dealing in mineral oil related products there could not be a better time to expand and increase business. With Mercosur my establishment will be undergoing a number of changes, but all of them will hopefully prove to be in my advantage. Mercosur will prove to be beneficial for my company in a number of ways. Firstly, given that the Mercosur does not yet deal with mineral oil related products my company along with a handful of others who have been in this industry for a while will have the opportunity to expand our business beyond our present limits.
Given the relaxed barrier on movements firms like mine will now be able to deal with Brazilian and Paraguayan clients directly and at much lower costs. While most might not realize it but such an easy flow of goods is of particular benefit to both them and us. Previously, not only was the movement of my goods from my country to theirs difficult but also quite expensive. Now with the removal of extra tariff the costs have reduced to a large extent, which means that the profits to be made are beyond belief.
There is a lot of demand for mineral oil related goods in countries neighboring our own since Venezuela is quite literally the sole producer of such products in the region. Formerly we often sold such products illegally to people from our neighboring countries who were eager to buy our produce. While this paid well, orders were far and in between and usually involved a lot of risk. Thankfully, now that the system has been made legal all such illicit activities can be discarded for fair play.
Given the possibility of expanding business my associates and I have also been planning to form a sort of unified organization, which may be able to operate easily in the countries around us. For the purpose we have decided to continue business in the usual manner and learn about the market and only take the plunge when a bit of planning has been done and a spot of funds have been acquired. (King, 2007) Despite the advantages that we obviously have at hand there are a few disadvantages that are causing concern in our circles.
One of these is the fact that many fears Brazil might be taking a lot of important policy decisions on behalf of our country. Being industrially powerful we fear that Brazil’s policy might be particularly difficult for us to keep up with. Also we recognize that with the free flow of goods many Brazilian companies might also start dealing with the sort of products we deal with presently very soon. The only way to keep up with these neophytes in the business would be to pump up our present expertise and outdo ourselves.
This is a difficult proposition, since competition in the field has been rare. But under the circumstances where survival will soon become an issue Venezuelan industries will undoubtedly unite and fight back to the best of their capacities.
References: Kar, P; (2007); History of International Business Structure; Dasgupta & Chatterjee: Kolkata King, H; (2007); Destinations: Latin America Today; HBT & Brooks Ltd: Auckland Lamb, Davis; (2006); Cult to Culture: The Development of Civilization on the Strategic Strata; National Book Trust: Wellington.
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