China proposes free-trade deal with Mercosur bloc

BUENOS AIRES (Reuters) – Chinese Premier Wen Jiabao asked leaders of South American trade bloc Mercosur to look into the possibility of a free-trade deal with the Asian nation, a key market for its commodities exports.

Wen spoke during an official visit to Argentina, where he signed a series of accords with President Cristina Fernandez and told agriculture officials he was interested in buying more Argentine corn.
“We should carry out feasibility studies about the establishment of a free-trade zone between China and Mercosur,” Wen told the presidents of Brazil, Argentina and Uruguay during a video conference.

Trade analysts say Brazil and Argentina would probably be wary of a free-trade deal with China as both nations take protectionist measures aimed at shielding local industry from imported goods.

The Mercosur bloc also includes Paraguay, which does not have diplomatic relations with Beijing because it has ties with Taiwan. China, the world’s second-largest economy, considers the island a breakaway province.