Acknowledging for a moment the H.C.Andersen book, and based on all the ethnic and cultural trappings of the three Disney animated films, I would say The Little Mermaid is set in an approximation of 17th century Europe, wouldn't you?
It's not that simple, of course. We all know Disney isn't set in the real world; most of it exists in this slightly surreal, cosmopolitan, post racial 17th Century-ish storybook land. It's basically the celluloid equivalent of a Renaissance Fair: Americans incongruously superimposing their contemporary society onto a cheerfully inaccurate mash-up of European stereotypes for shits and giggles. And, reality check: it's not serious. It's cartoons and kid's movies. Who gives a damn, right?
Well, as a cynical grown-up, it sometimes irks that the real life humans behind these works of fiction evidently give so much thought to depicting minority and indigenous cultures in a respectful and authentic way while attaching so little value to anything culturally European or ethnically white. I'm not just talking Disney here. I'm talking in general terms about every movie, series, drama, cartoon and animation that treats people who look like me living in a place that resembles my country, not as something to be preserved or celebrated, but as a dull, problematically white, blank canvas to be "improved" or even "corrected" with a political correct nip here and a progressive tuck there. It's unrelenting and it's tedious as hell. As tedious as always being the sidekick? I hear you reply. As tedious as being the first dude to die in every horror movie? Yeah, I'll grant you that. But we need progress - real progress, not just "progressive"-sounding decisions like race-swapping or gender-swapping white male characters.