Mercosur

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Mercosur

In March 1991 Argentina, Brazil, Paraguay, and Uruguay signed the Treaty of Asunción, creating Mercosur (in Spanish, Mercado Común del Sur; in Portuguese, Mercado Comum do Sul, known in Brazil as Mercosul), the Southern Common Market. It was founded to promote regional integration by establishing a common external tariff, coordinated macroeconomic policies, a common business policy toward outside parties, and free circulation of goods, services, and factors of production. The structure of Mercosur (Council, Group, and Business Commission) was defined in December 1994 through the Ouro Preto Protocol. A Permanent Arbitration Panel, based in Asunción, Paraguay, was created in February 2002, and implementation of the Mercosur Parliament began in Montevideo, Uruguay, in December 2006. Signatories to the Treaty of Asunción are full members, and Venezuela began the process of joining in 2006. Chile, Bolivia, Peru, Colombia, and Ecuador are all associate members.

As the largest economic bloc in Latin America, Mercosur had a population of more than 250 million people in 2006, with a gross domestic product in excess of US$1 trillion, nearly 76 percent of South America's GDP. Trade among member countries grew from US$5.1 billion in 1991 to $21.1 billion in 2005, with a positive trade balance of $54.1 billion that year with countries outside the zone.

With respect to other regional blocs, the U.S.-led initiative to form the FTAA (Free Trade Area of the Americas) has been all but paralyzed since 2004, owing to the joint decisions undertaken by members and difficulties in securing trade benefits. Similar causes and effects have virtually incapacitated the agreement with the European Union, the foundations for which were laid in 1992. However, significant progress has been made with respect to trade with Chile and the Andean Community (Peru, Ecuador, Bolivia, and Colombia) as well as concerning agreements with the World Trade Organization to remove restrictions blocking trade with developing countries, resulting in signed agreements with India and South Africa. The main intrazonal challenges include consolidation of a common customs policy, institutional optimization, and reducing the concerns felt by smaller countries that derive few benefits from trade. The Mercosur Structural Convergence Fund was created in December 2004 to address this last issue.

BIBLIOGRAPHY

Barbosa, Rubens Antônio, ed. Mercosul 15 anos. São Paulo: Imprensa Oficial do Estado de São Paulo, 2007.

Instituto para la Integración de América Latina y Caribe. Informe Mercosul 11. Series Informes Subregionales de Integración. Buenos Aires: BID/INTAL, November 2006.

Manzetti, Luigi. "The Political Economy of Mercosur." Journal of Interamerican Studies and World Affairs 35, no. 4 (1993–1994): 101-141.

Luigi Manzetti

Maria LetÍcia CorrÊa

Encyclopedia of Latin American History and Culture