The Southern Common Market, commonly known by
Spanish
Spanish might refer to:
* Items from or related to Spain:
**Spaniards are a nation and ethnic group indigenous to Spain
**Spanish language, spoken in Spain and many Latin American countries
**Spanish cuisine
Other places
* Spanish, Ontario, Can ...
abbreviation Mercosur, and
Portuguese
Portuguese may refer to:
* anything of, from, or related to the country and nation of Portugal
** Portuguese cuisine, traditional foods
** Portuguese language, a Romance language
*** Portuguese dialects, variants of the Portuguese language
** Portu ...
Mercosul, is a
South America
South America is a continent entirely in the Western Hemisphere and mostly in the Southern Hemisphere, with a relatively small portion in the Northern Hemisphere at the northern tip of the continent. It can also be described as the sout ...
n
trade bloc
A trade bloc is a type of intergovernmental agreement, often part of a regional intergovernmental organization, where barriers to trade (tariffs and others) are reduced or eliminated among the participating states.
Trade blocs can be stand-alone ...
established by the
Treaty of Asunción
The Treaty of Asunción was a treaty between the countries of Argentina, Brazil, Paraguay, and Uruguay signed on March 26, 1991. The objective of the treaty, signed in Asunción, was to establish a common market among the participating countries, ...
in 1991 and
Protocol of Ouro Preto
The 1994 Protocol of Ouro Preto was the continuation of economic policies setting up a customs union, as set forth four years earlier in the Treaty of Asunción by the four original Mercosur states. (Consisting of Argentina, Brazil, Paraguay and ...
in 1994. Its full members are
Argentina
Argentina (), officially the Argentine Republic ( es, link=no, República Argentina), is a country in the southern half of South America. Argentina covers an area of , making it the second-largest country in South America after Brazil, th ...
,
Brazil
Brazil ( pt, Brasil; ), officially the Federative Republic of Brazil (Portuguese: ), is the largest country in both South America and Latin America. At and with over 217 million people, Brazil is the world's fifth-largest country by area ...
,
Paraguay
Paraguay (; ), officially the Republic of Paraguay ( es, República del Paraguay, links=no; gn, Tavakuairetã Paraguái, links=si), is a landlocked country in South America. It is bordered by Argentina to the south and southwest, Brazil to th ...
, and
Uruguay
Uruguay (; ), officially the Oriental Republic of Uruguay ( es, República Oriental del Uruguay), is a country in South America. It shares borders with Argentina to its west and southwest and Brazil to its north and northeast; while bordering ...
.
Venezuela
Venezuela (; ), officially the Bolivarian Republic of Venezuela ( es, link=no, República Bolivariana de Venezuela), is a country on the northern coast of South America, consisting of a continental landmass and many islands and islets in th ...
is a full member but has been suspended since 1 December 2016. Associate countries are
Bolivia,
Chile
Chile, officially the Republic of Chile, is a country in the western part of South America. It is the southernmost country in the world, and the closest to Antarctica, occupying a long and narrow strip of land between the Andes to the east a ...
,
Colombia,
Ecuador
Ecuador ( ; ; Quechua: ''Ikwayur''; Shuar: ''Ecuador'' or ''Ekuatur''), officially the Republic of Ecuador ( es, República del Ecuador, which literally translates as "Republic of the Equator"; Quechua: ''Ikwadur Ripuwlika''; Shuar: ' ...
,
Guyana,
Peru
, image_flag = Flag of Peru.svg
, image_coat = Escudo nacional del Perú.svg
, other_symbol = Great Seal of the State
, other_symbol_type = National seal
, national_motto = "Firm and Happy f ...
, and
Suriname.
Mercosur's origins are linked to the discussions for the constitution of a regional economic market for Latin America, which go back to the treaty that established the
Latin American Free Trade Association The Latin American Free Trade Association, LAFTA, (later transformed into the Latin American Integration Association, es, Asociación Latinoamericana de Integración, pt, Associação Latino-Americana de Integração) was created in the 1960 Trea ...
in 1960, which was succeeded by the
Latin American Integration Association
The Latin American Integration Association / Asociación Latinoamericana de Integración / Associação Latino-Americana de Integração (LAIA / ALADI) is an international and regional scope organization. It was created on 12 August 1980 by the ...
in the 1980s. At the time, Argentina and Brazil made progress in the matter, signing the Iguaçu Declaration (1985), which established a bilateral commission, which was followed by a series of trade agreements the following year. The Integration, Cooperation and Development Treaty, signed between both countries in 1988, set the goal of establishing a
common market
The European Economic Community (EEC) was a regional organization created by the Treaty of Rome of 1957,Today the largely rewritten treaty continues in force as the ''Treaty on the functioning of the European Union'', as renamed by the Lisbo ...
, to which other Latin American countries could join. Paraguay and Uruguay joined the process and the four countries became signatories to the
Treaty of Asunción
The Treaty of Asunción was a treaty between the countries of Argentina, Brazil, Paraguay, and Uruguay signed on March 26, 1991. The objective of the treaty, signed in Asunción, was to establish a common market among the participating countries, ...
(1991), which established the Southern Common Market, a trade alliance aimed at boosting the regional economy, moving goods, people among themselves, workforce and capital. Initially a
free trade zone
A free-trade zone (FTZ) is a class of special economic zone. It is a geographic area where goods may be imported, stored, handled, manufactured, or reconfigured and re-exported under specific customs regulation and generally not subject to cu ...
was established, in which the signatory countries would not tax or restrict each other's imports. As of 1 January 1995, this area became a
customs union
A customs union is generally defined as a type of trade bloc which is composed of a free trade area with a common external tariff.GATTArticle 24 s. 8 (a)
Customs unions are established through trade pacts where the participant countries set up ...
, in which all signatories could charge the same quotas on imports from other countries (common external tariff). The following year, Bolivia and Chile acquired membership status. Other Latin American nations have expressed interest in joining the group.
Mercosur's purpose is to promote
free trade
Free trade is a trade policy that does not restrict imports or exports. It can also be understood as the free market idea applied to international trade. In government, free trade is predominantly advocated by political parties that hold econ ...
and the fluid movement of goods, people, and currency. Since its foundation, Mercosur's functions have been updated and amended many times; it currently confines itself to a
customs union
A customs union is generally defined as a type of trade bloc which is composed of a free trade area with a common external tariff.GATTArticle 24 s. 8 (a)
Customs unions are established through trade pacts where the participant countries set up ...
, in which there is free intra-zone trade and a common trade policy between member countries. In 2022, the Mercosur had generated a nominal gross domestic product (GDP) of around 5.1 trillion US dollars, placing the bloc as the
6th largest economy in the world. The bloc places high on the
human development index
The Human Development Index (HDI) is a statistic composite index of life expectancy, education (mean years of schooling completed and expected years of schooling upon entering the education system), and per capita income indicators, wh ...
. It has signed
free trade agreement
A free-trade agreement (FTA) or treaty is an agreement according to international law to form a free-trade area between the cooperating states. There are two types of trade agreements: bilateral and multilateral. Bilateral trade agreements occ ...
s with
Israel
Israel (; he, יִשְׂרָאֵל, ; ar, إِسْرَائِيل, ), officially the State of Israel ( he, מְדִינַת יִשְׂרָאֵל, label=none, translit=Medīnat Yīsrāʾēl; ), is a country in Western Asia. It is situated ...
,
Egypt
Egypt ( ar, مصر , ), officially the Arab Republic of Egypt, is a transcontinental country spanning the northeast corner of Africa and southwest corner of Asia via a land bridge formed by the Sinai Peninsula. It is bordered by the Medit ...
,
Japan and the
European Union
The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been de ...
, among others.
History
Background
![Mediators at the Niagara Falls peace conference, 1914](https://upload.wikimedia.org/wikipedia/commons/5/5b/Mediators_at_the_Niagara_Falls_peace_conference%2C_1914.jpg)
For five centuries South America has been the scene of some of the most violent battles in the Americas. Since the arrival of the Spanish and Portuguese to the continent, the
La Plata Basin
LA most frequently refers to Los Angeles, the second largest city in the United States.
La, LA, or L.A. may also refer to:
Arts and entertainment Music
* La (musical note), or A, the sixth note
* "L.A.", a song by Elliott Smith on ''Figure ...
has been the scene of Luso-Spanish disputes over territory (the territory that today is Uruguay, was once Spanish, then Portuguese, again Spanish and Brazilian). However, at the same time, in this region there are fundamental chapters of the political and economic emancipation of future Mercosur members.
During the 16th and 17th centuries, Spain organized the commercial system of its colonies around the "fleets and galleons" scheme, authorizing only certain ports the right to send or receive goods originating from these colonies. For cities like
Buenos Aires
Buenos Aires ( or ; ), officially the Autonomous City of Buenos Aires ( es, link=no, Ciudad Autónoma de Buenos Aires), is the capital and primate city of Argentina. The city is located on the western shore of the Río de la Plata, on South ...
, founded in 1580, this system threatened the region's economic development. To face this economic confinement, the population of Buenos Aires saw the only possible way out: the commercial exchange (albeit illegally) with Brazil. This was the beginning of a relationship destined to grow.
In the 19th century, the process of political emancipation in South America accentuated the contrasts between the countries of the region. During this period, important chapters in the history of Brazil, Argentina, Paraguay and Uruguay occurred. It is enough to mention the
Cisplatine War
The Cisplatine War (), also known as the Argentine-Brazilian War () or, in Argentine and Uruguayan historiography, as the Brazil War (''Guerra del Brasil''), the War against the Empire of Brazil (''Guerra contra el Imperio del Brasil'') or t ...
, the independence of the Republic of Uruguay, the
Uruguayan Great War, the
Ragamuffin War
The Ragamuffin War (Portuguese: ''Guerra dos Farrapos'' or ''Revolução Farroupilha'') was a Republican uprising that began in southern Brazil, in the province (current state) of Rio Grande do Sul in 1835. The rebels were led by generals Bento ...
, the
dispute between unitaries and federalists in Argentina and the
Paraguayan War
The Paraguayan War, also known as the War of the Triple Alliance, was a South American war that lasted from 1864 to 1870. It was fought between Paraguay and the Triple Alliance of Argentina, the Empire of Brazil, and Uruguay. It was the deadlies ...
: alliances, interventions and conflicts that forged the historical context of formation of the La Plata nation-states.
In 1941, in the middle of the
Second World War
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposi ...
, Brazil and Argentina for the first time tried to create a
Customs Union
A customs union is generally defined as a type of trade bloc which is composed of a free trade area with a common external tariff.GATTArticle 24 s. 8 (a)
Customs unions are established through trade pacts where the participant countries set up ...
between their economies. However, this did not happen due to the countries' diplomatic differences in relation to
Axis
An axis (plural ''axes'') is an imaginary line around which an object rotates or is symmetrical. Axis may also refer to:
Mathematics
* Axis of rotation: see rotation around a fixed axis
* Axis (mathematics), a designator for a Cartesian-coordinat ...
policies, after the
attack on Pearl Harbor
The attack on Pearl HarborAlso known as the Battle of Pearl Harbor was a surprise military strike by the Imperial Japanese Navy Air Service upon the United States against the naval base at Pearl Harbor in Honolulu, Territory of Hawaii ...
. With the end of the war, the need for interaction between nations became imminent and, consequently, economic blocs formed. In Latin America, however, there was no union that obtained satisfactory results.
Foz do Iguaçu Declaration
![Sede del Mercosur - Montevideo, Uruguay](https://upload.wikimedia.org/wikipedia/commons/5/5a/Sede_del_Mercosur_-_Montevideo%2C_Uruguay.jpg)
In December 1985, Brazilian President
José Sarney
José Sarney de Araújo Costa (; born José Ribamar Ferreira de Araújo Costa; 24 April 1930) is a Brazilian politician, lawyer, and writer who served as 31st president of Brazil from 1985 to 1990. He briefly served as the 20th vice president of ...
and Argentine President
Raúl Alfonsín
Raúl Ricardo Alfonsín (12 March 1927 – 31 March 2009) was an Argentine lawyer and statesman who served as President of Argentina from 10 December 1983 to 8 July 1989. He was the first democratically elected president after more than ...
signed the Iguaçu Declaration, the basis for economic integration of the so-called
Southern Cone. Both countries had just come out of a dictatorial period and were facing the need to redirect their economies to the outside and globalized world.
Both countries had contracted a large external debt during the period of the military governments and did not enjoy credit abroad. There was a great need for investment in the countries, but no money. This common situation made them both realize the mutual need. Shortly after the signing of the Iguaçu Declaration in February 1986, Argentina declared its intention of a "preferential association" with Brazil. In a private home in
Don Torcuato
Don Torcuato is a town in the Tigre Partido of the urban agglomeration of Greater Buenos Aires, Argentina. It is named after Marcelo Torcuato de Alvear, ex-President of Argentina, as he had his ranch and residency there. Most of the streets are n ...
, there was a meeting to discuss the matter. The discussion, lasting two days, took place in an atmosphere of exchanging ideas and stating positions regarding the status of the area's economy.
After a few weeks, Brazil invited Argentina to a similar meeting, in
Itaipava, also in a private residence. This signaled acceptance of the Argentine initiative and the formation of an agreement, with the objective of promoting the economic development of both countries and integrating them into the world. Out of this meeting came the ''Argentina-Brazil Integration and Economics Cooperation Program'' or PICE (Portuguese: Programa de Integração e Cooperação Econômica Argentina-Brasil, Spanish: Programa de Integración y Cooperación Económica Argentina-Brasil). Protocol Number 20 of the program proposed the
Gaucho
A gaucho () or gaúcho () is a skilled horseman, reputed to be brave and unruly. The figure of the gaucho is a folk symbol of Argentina, Uruguay, Rio Grande do Sul in Brazil, and the south of Chilean Patagonia. Gauchos became greatly admired and ...
as a currency for regional trade. For many, the idea of integration in South America seemed more like an abstraction, owing to various unsuccessful experiences in the past. However, this was perceived as different.
The Buenos Aires Act
On 6 July 1990, the President of Brazil,
Fernando Collor
Fernando Affonso Collor de Mello (; born 12 August 1949) is a Brazilian politician who served as the 32nd president of Brazil from 1990 to 1992, when he resigned in a failed attempt to stop his impeachment trial by the Brazilian Senate. Coll ...
, and the President of Argentina,
Carlos Menem, signed the Buenos Aires Act aimed at total customs integration between the two countries. It was decided that all measures for the construction of the customs union should be completed by 31 December 1994. To ensure compliance with the deadlines, the Binational Working Group was created, the body whose responsibility was to define methods for creating the common market between the two nations. In September, the governments of Paraguay and Uruguay showed a strong interest in the regional integration process, leading to the full perception by the signatories that a more comprehensive treaty was needed.
Founding
![Izamiento](https://upload.wikimedia.org/wikipedia/commons/a/a5/Izamiento.jpg)
Mercosur was finally established in 1991 by the
Treaty of Asunción
The Treaty of Asunción was a treaty between the countries of Argentina, Brazil, Paraguay, and Uruguay signed on March 26, 1991. The objective of the treaty, signed in Asunción, was to establish a common market among the participating countries, ...
, based on the Buenos Aires Act, the Treaty of Asunción defined rules and conditions for the creation of a free trade zone among its four signatories. Likewise, it was decided that all measures for the construction of the common market should be completed by 31 December 1994 with the amendment of the
Treaty of Ouro Preto. In 2001, celebrating the 10th anniversary of the bloc's creation, the Mercosur flag was hoisted for the first time at Mercosur's headquarters in
Montevideo.
The main implications of this free trade zone are:
*The free movement of goods, services and productive factors between countries, through the elimination of customs duties and non-tariff restrictions on the movement of goods and any other measure to the same effect, with the establishment of a common external tariff and the adoption of a common commercial policy towards third countries or economic blocs;
*Products originating in the territory of a signatory country will have, in another signatory country, the same treatment applied to products of national origin;
*The coordination of foreign trade, agricultural, industrial, fiscal, monetary, foreign exchange and capital policies, of others that are agreed, in order to ensure adequate conditions of competition between members, with the commitment of these countries to harmonize their legislation, especially in areas of general importance, to strengthen the integration process;
*In relations with non-signatory countries, members of the bloc will ensure equal conditions of trade. In this way, they will apply their national laws to inhibit imports whose prices are influenced by subsidies, dumping or any other unfair practice. At the same time, the bloc's countries will coordinate their respective national policies in order to develop common rules on trade competition.
It was defined that during the transition period, the signatory countries would adopt a general regime of origin, a system for resolving disputes and safeguard clauses. To ensure order and compliance with deadlines, two institutional bodies were created:
*Common Market Group: a body formed by four full members and four alternate members from each country, from the respective Ministry of Foreign Affairs, Ministry of Economy and Central Bank. Until the creation of the Arbitral Tribunals, the Common Market Group was the main authority in resolving disputes;
*Common Market Council: the institution with the highest authority in the treaty, created to manage political decisions and ensure compliance with established deadlines.
The Treaty of Asunción also decided that the accession of a new member, in order to be effective, must be approved by legislative decree in all signatory countries. Otherwise, the membership process will be invalid.
The founding of the
Mercosur Parliament
The Mercosur Parliament ( es, link=no, Parlamento del Mercosur, pt, Parlamento do Mercosul), known also as Parlasur, or Parlasul, is the parliamentary institution of the Mercosur trade bloc. It is composed of 81 MPs, 18 from each member states ...
was agreed upon at the December 2004 presidential summit. Up to 2010 it was planned to have 18 representatives from each country, regardless of population.
Venezuela adhesion and suspension of Paraguay
Venezuela's history in Mercosur began on 16 December 2003, during a Mercosur summit held in Montevideo, when the ''Mercosur Economic Complementation Agreement'' with Colombia, Ecuador and Venezuela was signed. This agreement established a timetable for the creation of a free trade zone among the signatory states and the full members of Mercosur, with a gradual reduction in tariffs. In this way, these countries were successful in negotiations for the formation of a
free trade zone
A free-trade zone (FTZ) is a class of special economic zone. It is a geographic area where goods may be imported, stored, handled, manufactured, or reconfigured and re-exported under specific customs regulation and generally not subject to cu ...
with Mercosur, since an economic complementation agreement, with full compliance with its schedule, is the item required for the rise of a new associate. However, on 8 July 2004, Venezuela was elevated to associate member status, without even completing the schedule agreed with the Common Market Council. The following year, the bloc recognized it as an associated nation in the process of accession, which in practice meant that the state had a voice, but not a vote.
The Caribbean country's Accession Protocol was signed in 2006 by all presidents of countries in the bloc. Subsequently, the Uruguayan and Argentine congresses approved the entry of the new member. The Brazilian congress did so only in December 2009. However, the Paraguayan congress did not approve it and, therefore, made it impossible for the Caribbean nation to fully join. Subsequently, on 29 June 2012, in response to
Fernando Lugo
Fernando Armindo Lugo Méndez (; born 30 May 1951) is a Paraguayan politician and laicized Catholic bishop who was President of Paraguay from 2008 to 2012. Previously he was a Roman Catholic priest and bishop, serving as Bishop of the Diocese ...
's summary dismissal of the presidency, the Mercosur presidents decreed the Paraguayan suspension until the next presidential election, in April 2013. A month later, the bloc presidents acknowledged their adhesion of Venezuela and several trade agreements have been signed. It was suggested that the decision could be reversed with the Paraguayan return by exercising its veto power, which was not the case.
The decision was the subject of controversy. For some economists, Venezuela's acceptance as a full member of Mercosur expands the bloc's economic importance and opens up new business and investment opportunities. However, for others, the decision was seen as hasty, imposed by the governments of Brazil and Argentina and motivated purely by political interests.
Bolivian membership status
On 7 December 2012, Bolivian President
Evo Morales
Juan Evo Morales Ayma (; born 26 October 1959) is a Bolivian politician, trade union organizer, and former cocalero activist who served as the 65th president of Bolivia from 2006 to 2019. Widely regarded as the country's first president to c ...
signed a protocol aimed at accession to full membership in the bloc. Such a proposal requires review and possible legislative approval. On 7 July 2015, the heads of Mercosur having decided to accept Bolivia's request to become a full member country, Bolivian president Evo Morales signed the Brasilia protocol. This allowed Bolivia full membership in Mercosur.
Suspension of Venezuela
In August 2016, the presidents of Brazil, Argentina, and Paraguay, while present in
Rio de Janeiro
Rio de Janeiro ( , , ; literally 'River of January'), or simply Rio, is the capital of the state of the same name, Brazil's third-most populous state, and the second-most populous city in Brazil, after São Paulo. Listed by the GaWC as a ...
for the
Olympic Games
The modern Olympic Games or Olympics (french: link=no, Jeux olympiques) are the leading international sporting events featuring summer and winter sports competitions in which thousands of athletes from around the world participate in a vari ...
, met to discuss suspending Venezuela from Mercosur. The three countries were in doubt about whether Venezuela was complying with the union's requirements for full membership, citing
human rights violations
Human rights are moral principles or normsJames Nickel, with assistance from Thomas Pogge, M.B.E. Smith, and Leif Wenar, 13 December 2013, Stanford Encyclopedia of PhilosophyHuman Rights Retrieved 14 August 2014 for certain standards of hum ...
among other issues. In fact, Venezuela was rejected from assuming the presidency of Mercosur by those three countries, prompting a dispute that continued to the end of the year.
On 21 November 2016, Paraguayan Foreign Minister
Eladio Loizaga announced that Venezuela would be suspended in December 2016 after the nation was given a three-month period to reform its laws to abide to Mercosur requirements, with Mercosur noting that "rules governing trade, politics, democracy and human rights" needed to be overhauled in Venezuela. On 1 December 2016, Venezuela was suspended from Mercosur.
On 5 August 2017, the foreign ministers of Argentina, Paraguay, Uruguay and Brazil affirmed that Venezuela's membership in Mercosur is suspended indefinitely in response to the "rupture of the democratic order" in that country following the
30 July 2017 Constituent Assembly elections. The bloc by-laws have no provision for expulsion. However, trade and migration policies stay without changes to avoid aggravating the
social crisis A social crisis (or alternately a societal crisis) is a crisis in which the basic structure of a society experiences some drastic interruption or decline.
Overview
A social crisis can be sudden and immediate, or it can be some gross societal ineq ...
. Brazilian Foreign Minister
Aloysio Nunes
Aloysio Nunes Ferreira Filho (born 5 April 1945) is a Brazilian lawyer and politician. A member of PSDB, Nunes was a senator from São Paulo from 2011 to 2017, and was Brazil's Minister of Foreign Affairs from 2017 to 2019.
Biography
Aloysio Nu ...
said that Venezuela will remain suspended until the country "re-establishes democracy."
In January 2019, the opposition-majority
National Assembly
In politics, a national assembly is either a unicameral legislature, the lower house of a bicameral legislature, or both houses of a bicameral legislature together. In the English language it generally means "an assembly composed of the rep ...
declared incumbent
Nicolás Maduro's
2018 reelection invalid, entering a
presidential crisis. During a July 2019 summit in
Santa Fe, Argentina
Santa Fe de la Vera Cruz (; usually called just Santa Fe) is the capital city of the province of Santa Fe, Argentina. It is situated in north-eastern Argentina, near the junction of the Paraná and Salado rivers. It lies from the Hernanda ...
, the bloc called for "free, fair and transparent presidential elections, as soon as possible" in Venezuela. The presidents of the four member countries signed a statement expressing concern "for the grave crisis that Venezuela is going through, which is seriously affecting the humanitarian situation and human rights."
Geography
The territory of Mercosur consists of the combined territories of six of the 12 countries of South America and their population. Including the overseas territories of member states, Mercosur experiences most
types of climate from
Antarctic to
tropical
The tropics are the regions of Earth surrounding the Equator. They are defined in latitude by the Tropic of Cancer in the Northern Hemisphere at N and the Tropic of Capricorn in
the Southern Hemisphere at S. The tropics are also referred to ...
, rendering meteorological averages for Mercosur as a whole meaningless. The majority of the population lives in areas with a
subtropical climate (Uruguay, Southern Paraguay, Northeastern and Center Argentina and Southern and Southeastern Brazil), or a tropical climate (Venezuela and Northeastern Brazil). The Mercosur member states are home to the
world's highest uninterrupted waterfall,
Angel Falls
Angel Falls ( es, Salto Ángel; Pemon language: ''Kerepakupai Merú'' meaning "waterfall of the deepest place", or ''Parakupá Vená'', meaning "the fall from the highest point") is a waterfall in Venezuela.
It is the world's tallest unint ...
in Venezuela; the largest river by volume, the
Amazon River in Brazil; the longest mountain range, the
Andes
The Andes, Andes Mountains or Andean Mountains (; ) are the longest continental mountain range in the world, forming a continuous highland along the western edge of South America. The range is long, wide (widest between 18°S – 20°S ...
(whose highest mountain is
Aconcagua
Aconcagua () is a mountain in the Principal Cordillera of the Andes mountain range, in Mendoza Province, Argentina. It is the highest mountain in the Americas, the highest outside Asia, and the highest in the Southern Hemisphere with a summi ...
at in Argentina); the largest rainforest, the
Amazon Rainforest in Brazil; and much more if we take the associated members into account, such as the highest capital city,
La Paz, Bolivia
La Paz (), officially known as Nuestra Señora de La Paz (Spanish pronunciation: ), is the seat of government of the Plurinational State of Bolivia. With an estimated 816,044 residents as of 2020, La Paz is the third-most populous city in Bol ...
; the highest commercially navigable lake in the world,
Lake Titicaca
Lake Titicaca (; es, Lago Titicaca ; qu, Titiqaqa Qucha) is a large freshwater lake in the Andes mountains on the border of Bolivia and Peru. It is often called the highest navigable lake in the world. By volume of water and by surface area, i ...
in Peru; the driest non-polar place on earth, the
Atacama Desert
The Atacama Desert ( es, Desierto de Atacama) is a desert plateau in South America covering a 1,600 km (990 mi) strip of land on the Pacific coast, west of the Andes Mountains. The Atacama Desert is the driest nonpolar desert in th ...
; and, excluding research stations in
Antarctica
Antarctica () is Earth's southernmost and least-populated continent. Situated almost entirely south of the Antarctic Circle and surrounded by the Southern Ocean, it contains the geographic South Pole. Antarctica is the fifth-largest cont ...
, the world's southernmost permanently inhabited community,
Puerto Toro, Chile.
File:Monte Aconcagua.jpg, Mount Aconcagua
Aconcagua () is a mountain in the Principal Cordillera of the Andes mountain range, in Mendoza Province, Argentina. It is the highest mountain in the Americas, the highest outside Asia, and the highest in the Southern Hemisphere with a summi ...
in Argentina.
File:Amazonie.jpg, The Amazon rainforest in Brazil.
File:Lago Iporá vista.jpg, Lake Iporá in Uruguay.
File:ParaguayChacoBorealdryseason.JPG, Gran Chaco
The Gran Chaco or Dry Chaco is a sparsely populated, hot and semiarid lowland natural region of the Río de la Plata basin, divided among eastern Bolivia, western Paraguay, northern Argentina, and a portion of the Brazilian states of Mato ...
in Paraguay.
File:SaltoAngel6.jpg, The Salto Ángel
Angel Falls ( es, Salto Ángel; Pemon language: ''Kerepakupai Merú'' meaning "waterfall of the deepest place", or ''Parakupá Vená'', meaning "the fall from the highest point") is a waterfall in Venezuela.
It is the world's tallest uninterr ...
falls in Venezuela.
One Mercosur full member, Argentina, has a claim to
Antarctica
Antarctica () is Earth's southernmost and least-populated continent. Situated almost entirely south of the Antarctic Circle and surrounded by the Southern Ocean, it contains the geographic South Pole. Antarctica is the fifth-largest cont ...
called
Argentine Antarctica
Argentine Antarctica ( es, Antártida Argentina or Sector Antártico Argentino) is an area of Antarctica claimed by Argentina as part of its national territory. It consists of the Antarctic Peninsula and a triangular section extending to the ...
, part of the province of
Tierra del Fuego
Tierra del Fuego (, ; Spanish for "Land of the Fire", rarely also Fireland in English) is an archipelago off the southernmost tip of the South American mainland, across the Strait of Magellan. The archipelago consists of the main island, Isla ...
, which overlap partially the claim of a Mercosur associated state which is Chile and its
Chilean Antarctica
The Chilean Antarctic Territory or Chilean Antarctica (Spanish: ''Territorio Chileno Antártico'', ''Antártica Chilena'') is the territory in Antarctica claimed by Chile. The Chilean Antarctic Territory ranges from 53° West to 90° West and f ...
. Brazil does not claim any part of Antarctican territory but it does has a zone of interest called
Brazilian Antarctica
Brazilian Antarctica ( pt, Antártida Brasileira or ''Antártica Brasileira'') is the Antarctic territory south of 60°S, and from 28°W to 53°W, proposed as "Zone of Interest" by geopolitical scholar Therezinha de Castro. While the substance ...
which overlap Argentina's claim.
Member states
![Mercosur](https://upload.wikimedia.org/wikipedia/commons/9/9a/Mercosur.png)
Mercosur is composed of 5
sovereign member states: Argentina; Brazil; Paraguay; Uruguay and Venezuela (suspended since December 2016); and 7 associated states: Suriname, Guyana, Colombia, Ecuador, Peru, Chile and Bolivia, this latter in process of incorporation (since 17 July 2015); Plus two observer states: Mexico and New Zealand.
Following the
impeachment of President Fernando Lugo by the Paraguayan Senate, this country was suspended from Mercosur, and the admittance of Venezuela as a full member became effective on 31 July 2012.
Venezuela had four years to fully adapt to the trade bloc regulations and failed to do so, with the nation being suspended from Mercosur on 1 December 2016.
[
Directly subordinated to the Common Market Group, the work subgroups draw up the minutes of the decisions to submit for the consideration of the council, and study specific Mercosur concerns. The work subgroups are:
* Commercial matters
* Customs matters
* Technical standards
* Tax and monetary policies relating to trade
* Land transport
* Sea transport
* Industrial and technology policies
* Agricultural policy
* Energy policy
* Coordination of macroeconomic policies
* Labor, employment and social security matters
Work subgroups are held quarterly, alternating in every member state, in alphabetical order, or at the Common Market Group Administrative Office. Activities are carried out by the Work Subgroups in two stages: preparatory and conclusive. In the preparatory stage, members of the Work Subgroups may request the participation of representatives from the private sector of each member state. The decision-making stage is reserved exclusively for official representatives of the member states. The delegations of representatives from the private sector in the preparatory stage of the Work Subgroup activities will have a maximum of three representatives for each member state directly involved in any of the stages of the production, distribution or consumption process for the products that fall within the scope of the subgroup's activities.,
]
Demographics
Population
Mercosur has a population of 284 million among its full member states. The region has several areas of sparse demographics such as tropical forests and deserts, but it is also highly urbanized with the presence of two alpha cities – São Paulo
São Paulo (, ; Portuguese for ' Saint Paul') is the most populous city in Brazil, and is the capital of the state of São Paulo, the most populous and wealthiest Brazilian state, located in the country's Southeast Region. Listed by the Ga ...
and Buenos Aires
Buenos Aires ( or ; ), officially the Autonomous City of Buenos Aires ( es, link=no, Ciudad Autónoma de Buenos Aires), is the capital and primate city of Argentina. The city is located on the western shore of the Río de la Plata, on South ...
– and several beta cities such as Montevideo, Rio de Janeiro, Brasilia, etc. The population is diverse, comprising people of European, Africans and Indigenous descent. People of Afro-Latin American descent tend to be concentrated in Brazil and Uruguay, with a smaller, but historic Afro-Argentine
Afro-Argentines are people in Argentina of primarily Sub-Saharan African descent. The Afro-Argentine population is the result of people being brought over during the transatlantic slave trade during the centuries of Spanish domination in the reg ...
community in Argentina and an emerging population in Chile, the latter largely of Haitian origin. There is a high percentage of mestizos
(; ; fem. ) is a term used for racial classification to refer to a person of mixed European and Indigenous American ancestry. In certain regions such as Latin America, it may also refer to people who are culturally European even though thei ...
that vary greatly in composition by place. There is also a smaller population of Asians, notably in Brazil. The white population forms a majority in Argentina and Uruguay and represents about 45 percent in Brazil. Mestizos form the majority population in Paraguay, making it distinct from its immediate neighbors. Almost all Mercosur nations have significant indigenous American populations, especially in Paraguay (Guaraní is a national language in the country along with Spanish, and almost all Paraguayans have Guaraní genetic ancestry), Argentina (especially in the Northwest and Southwest of The country), Brazil (in the Northern and Northwest Amazonian states of the nation, where Native American tribes have vast reservation lands).
Urbanization
Languages
Portuguese, Spanish and Guarani are the three official languages of the Mercosur, as they are the official languages of the five full members – Portuguese is the official language of Brazil, Spanish is the official language of all other full member countries, while Paraguay also have Guarani as a co-official language. Along with Paraguay (where it is one of two official languages), parts of Argentina (notably Corrientes
Corrientes (; Guaraní: Taragüí, literally: "Currents") is the capital city of the province of Corrientes, Argentina, located on the eastern shore of the Paraná River, about from Buenos Aires and from Posadas, on National Route 12. It ha ...
) speak Guaraní. However, the Mercosur does not provide all, or even most, services in Guaraní. The official website and almost all official summits are only held in Spanish and Portuguese. Important documents, such as legislation, are translated into Portuguese and Spanish.
Currently, among the full members, Portuguese is the most spoken language, with over 210 million native speakers as of 2019, while Spanish accounts for 83 million speakers approximately. Even though language policy is the responsibility of member states, Mercosur institutions promote multilingualism among its citizens, and while Brazil has enforced Spanish as a foreign language to be taught at school, Argentina and Venezuela have done so with Portuguese. Although Portuguese is the most spoken language by the bloc's population, Spanish is the more used language on internal affairs, as it is an official language to most members.
Merchandise trade
Intra-Mercosur merchandise trade (excluding Venezuela) grew from US$10 billion at the inception of the trade bloc in 1991, to US$88 billion in 2010; Brazil and Argentina each accounted for 43% of this total. The trade balance within the bloc has historically been tilted toward Brazil, which recorded an intra-Mercosur balance of over US$5 billion in 2010. Trade within Mercosur amounted to only 16% of the four countries' total merchandise trade in 2010, however; trade with the European Union (20%), China (14%), and the United States (11%) was of comparable importance. Exports from the bloc are highly diversified, and include a variety of agricultural, industrial, and energy goods. Merchandise trade with the rest of the world in 2010 resulted in a surplus for Mercosur of nearly US$7 billion; trade in services Trade in Services refers to the sale and delivery of an intangible product, called a service, between a producer and consumer. Trade in services that takes place between a producer and consumer that are, in legal terms, based in different countrie ...
, however, was in deficit by over US$28 billion. The EU and China maintained a nearly balanced merchandise trade with Mercosur in 2010, while the United States reaped a surplus of over US$14 billion; Mercosur, in turn, earned significant surpluses (over US$4 billion each in 2010) in its trade with Chile and Venezuela. The latter became a full member in 2012.
Structure
The Asunción Treaty and Ouro Preto Protocol established the basis for the institutional Mercosur structure, creating the Common Market Council and the Common Market Group, both of which function at the outset of the transition phase. As provided for in this Treaty, before establishing the common market the member nations must call a special meeting to determine the definitive institutional structure for the public agencies managing Mercosur, as well as define the specific functions of each agency and the decision making process.
Common Market Council
The council is the highest-level agency of Mercosur with the authority to conduct its policy, and responsibility for compliance with the objects and time frames set forth in the Asuncion Treaty. The council is composed of the Ministers of Foreign Affairs and the Economy (or the equivalent) of all five countries. Member states preside over the Council in rotating alphabetical order, for six-month periods. Meetings: Council members shall meet whenever necessary, but at least once a year. The presidents of the member nations shall partake of the annual Common Market Council meeting whenever possible. Decision Making: Council decisions shall be made by consensus, with representation of all member states.
Common Market Group
The Group is the executive body of Mercosur, and is coordinated by the Ministries of Foreign Affairs of the member states. Its basic duties are to cause compliance with the Asuncion Treaty and to take resolutions required for implementation of the decisions made by the council. Furthermore, it can initiate practical measures for trade opening, coordination of macroeconomic
Macroeconomics (from the Greek prefix ''makro-'' meaning "large" + ''economics'') is a branch of economics dealing with performance, structure, behavior, and decision-making of an economy as a whole.
For example, using interest rates, taxes, and ...
policies, and negotiation of agreements with nonmember states and international agencies, participating when need be in resolution of controversies under Mercosur. It has the authority to organize, coordinate and supervise Work Subgroups and to call special meetings to deal with issues of interest. Composition: The Common Market Group shall be made up of four permanent members and four alternates from each member state, representing the following public
In public relations and communication science, publics are groups of individual people, and the public (a.k.a. the general public) is the totality of such groupings. This is a different concept to the sociological concept of the ''Öffentlichk ...
agencies: (i) the Ministry of Foreign Affairs; (ii) the Ministry of Economy, or the equivalent (from industry, foreign affairs and/or economic coordination); and (iii) the Central Bank
A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union,
and oversees their commercial banking system. In contrast to a commercial bank, a central b ...
. The members of the Common Market Group appointed by a given member state will constitute the National Section of the Common Market Group for that particular nation. Meetings: The Common Market Group will meet ordinarily at least once every quarter in the member states, in rotating alphabetical order. Special meetings may be freely called at any time, at any previously scheduled place. The meetings will be coordinated by the Head of the Delegation of the host member state. Decision Making: Common Market Group decisions shall be made by consensus, with the representation of all member states. The official Mercosur languages will be Portuguese and Spanish, and the official version of all work papers will be prepared in the language of the country hosting the meeting.
Administrative and socioeconomic
The Administrative Office will keep documents and issue the Mercosur official bulletin in both Portuguese and Spanish, and will also be charged with communicating the activities of the Common Market Group so as to allow for the maximum disclosure of decisions and the relevant documentation. The Socioeconomic
Socioeconomics (also known as social economics) is the social science that studies how economic activity affects and is shaped by social processes. In general it analyzes how modern societies progress, stagnate, or regress because of their l ...
Advisory Forum is consultative by nature, and represents the various socioeconomic sectors of the member nations.
Work subgroups
Directly subordinated to the Common Market
The European Economic Community (EEC) was a regional organization created by the Treaty of Rome of 1957,Today the largely rewritten treaty continues in force as the ''Treaty on the functioning of the European Union'', as renamed by the Lisbo ...
Group, the Work Subgroups draw up the minutes of the decisions to submit for the consideration of the council, and conduct studies on specific Mercosur concerns. The work subgroups are the following: commercial matters; customs matters; technical standards; tax and monetary policies relating to trade; land transport; sea transport; industrial and technology policies; agricultural policy; energy policy; coordination of macroeconomic policies; and labor, employment and social security matters. meetings. The meetings of the Work subgroups will be held quarterly, alternating in every member state, in alphabetical order, or at the Common Market Group Administrative Office. Activities will be carried out by the Work Subgroups in two stages: preparatory and conclusive. In the preparatory stage, the members of the Work Subgroups may request the participation of representatives from the private sector of each member state. The decision-making stage is reserved exclusively for official representatives of the member states. The delegations of representatives from the private sector in the preparatory stage of the Work Subgroup activities will have a maximum of three representatives for each member state directly involved in any of the stages of the production, distribution or consumption process for the products that fall within the scope of the subgroup's activities.
Joint Parliamentary Committee
The Committee
A committee or commission is a body of one or more persons subordinate to a deliberative assembly. A committee is not itself considered to be a form of assembly. Usually, the assembly sends matters into a committee as a way to explore them more ...
will have both an advisory and decision-making nature; with powers to submit proposals as well. It will be competent, inter alia, to: follow up on the integration process and keep the respective Congress
A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of ...
es informed; Take the necessary steps for the future instatement of a Mercosur Parliament
The Mercosur Parliament ( es, link=no, Parlamento del Mercosur, pt, Parlamento do Mercosul), known also as Parlasur, or Parlasul, is the parliamentary institution of the Mercosur trade bloc. It is composed of 81 MPs, 18 from each member states ...
; Organize subcommittees to examine matters relating to the integration process; Submit its recommendations to the Common Market Council and Group as to how the integration process should be conducted and Southern Common Market formed; Make the adjustments necessary to harmonize the laws of the different member states and submit them to the respective Congresses; Establish relationships with private entities in each of the member states, as well as international agencies and bureaus so as to obtain information and specialized assistance with matters of interest: Establish relationships targeting cooperation with Congresses of the nonmember nations and entities involved in regional integration schemes; Subscribe to cooperation and technical assistance accords with public and/or private entities whether domestic, supranational or international. The committee will be composed of a maximum of 64 acting parliamentary members, 16 per member state, and an equal number of alternates, appointed by the Congress to which they pertain, and with a term of office of at least two years. The meetings shall be conducted by a directors' board consisting of four presidents (one for each member state). The committee will ordinarily meet twice a year, and extraordinarily whenever summoned by any of its five presidents. Meetings are held in the territory of each member state on a successive and alternating basis. Decision Making: Meetings of the Joint Parliamentary Committee will only be valid when attended by parliamentary delegations from all member states. Decisions by the Joint Parliamentary Committee will be made by consensus vote of the majority of the members accredited by the respective Congresses of each member state. Portuguese and Spanish are the official languages of the Joint Parliamentary Committee.
Trade Commission
The Trade Commission will assist the Mercosur executive body, always striving to apply the instruments of common trade policy agreed to by the member states for operation of the customs unification. The commission should also follow up on the development of issues and matters related to common trade policies, the intra-Mercosur trade and trade with other countries. The commission will have five actual members and four alternates, with each member nation's indicating a member. The Trade Commission shall exert every effort to apply common trade policy instruments such as: trade agreements with other countries or international entities; administrative/commercial product lists; final adaptation system for Mercosur customs unification; origin system; free-trade zone
A free-trade zone (FTZ) is a class of special economic zone. It is a geographic area where goods may be imported, stored, handled, manufactured, or reconfigured and re-exported under specific customs regulation and generally not subject to cus ...
system, special customs areas and export processing zones; system to discourage unfair trade practices; elimination and harmonization of tariff restrictions; nonmember country safeguard systems; customs coordination and harmonization; consumer protection systems; and export incentive harmonization.
Furthermore, the trade commission should speak out regarding the issues raised by the member states regarding application and compliance with common offshore tariffs and other common trade policy instruments. The commission shall meet at least once a month, as well as whenever asked to by the Mercosur executive agency or by a member state. The commission can take decisions entailing administration and application of trade policies adopted under Southern Common Market, and whenever necessary submit proposals to the executive body regarding regulation of the areas under its authority; additionally, it can propose new guidelines or modify those in existence in Mercosur trade and customs matters. In this respect, the trade commission can propose a change in the import duty on specific items under common external tariff
A common external tariff (CET) must be introduced when a group of countries forms a customs union. The same customs duties, import quotas, preferences or other non-tariff barriers to trade apply to all goods entering the area, regardless of which ...
s, including cases referring to development of new Mercosur production activities. To better achieve its objectives, the trade commission can create technical committees targeting direction and supervision of the work it engages in. It can also adopt internal operating regulations. Proposals and decisions of the trade commission will be taken by a consensus of the representatives indicated by each member nation. Any disputes ensuing from the application, interpretation or compliance with the acts issued by the trade commission are referred to the Mercosur executive body, and should be resolved using the directives set forth in the Dispute Resolution System adopted under Southern Common Market.
International jurisdiction over contractual matters
The rules on litigation jurisdiction over contractual matters will apply to disputes arising from civil
Civil may refer to:
*Civic virtue, or civility
*Civil action, or lawsuit
* Civil affairs
*Civil and political rights
*Civil disobedience
*Civil engineering
*Civil (journalism), a platform for independent journalism
*Civilian, someone not a membe ...
or commercial international contracts between private-law legal entities or individuals provided that: They are domiciled or headquartered in different member states: At least one of the parties to the contract is domiciled or headquartered in any member state and, additionally, has made a choice of jurisdiction in favor of a court in one of the member states. In this case, there must be a reasonable connection between the jurisdiction chosen and the controversy. The scope of the application of the international jurisdiction guidelines over contractual matters excludes the following: legal relationships between bankrupt entities/individuals and their creditors and any other analogous proceedings (especially concordatas composition with creditors); matters under agreements involving family and succession law; social security contracts; administrative contracts; employment contracts; consumer sales contracts; transport contracts; insurance policies; and rights in rem.
Choice of jurisdiction
Courts in member nations to whose jurisdiction the contracted parties have agreed to submit the matter in writing will have jurisdiction to settle controversies stemming from civil or commercial international contracts.
Agreement of choice
The jurisdiction can be agreed on at the time the contract is signed, during the life of the contract, or even when the dispute actually arises. The validity and effects of the choice of venue will be governed by the law of the member nations that normally have jurisdiction to hear the case, always resorting to the law most favorable to the validity of the contract. Whether or not jurisdiction is chosen, such jurisdiction will be prorogated in favor of the courts of the member state where the proceedings are in fact filed, provided the respondent voluntarily allows this in an affirmative and unfeigned way.
Subsidiary jurisdiction
Should the contracted parties not agree on courts competent to settle disputes, the member state chosen by the plaintiff of the case has jurisdiction—the court of the place where the contract is to be performed, the court of the domicile of the respondent, or the court of the domicile
Domicile may refer to:
* Home, a place where someone lives
* Domicile (astrology)
In astrology, a planet's domicile (or less commonly house, not to be confused with the astrological house system) is the zodiac sign over which it has rulership ...
, or headquarters of the claimant when the latter can show that it has done its part. For purposes of item (i) above the place of performance of the contract is the member state where the obligations on which the claim is based have been or should be performed, taking into consideration the following: For contracts involving certain specific items, the place where they existed at the time of contract signing; For contracts involving specific items according to their type, the place of domicile of the debtor at the time of contract signing; For contracts involving fungible
In economics, fungibility is the property of a good or a commodity whose individual units are essentially interchangeable, and each of whose parts is indistinguishable from any other part. Fungible tokens can be exchanged or replaced; for exam ...
items, the place of domicile of the debtor at the time of conclusion of the contract; and For service rendering contracts:
* If in regard to items, this the place where they were at the time of contract signing.
* If effectiveness is related to any special place, this is the place where they were to produce effects.
* In all other cases, this is the place of domicile of the debtor at the time of contract signing. For purposes of application of second item above for determination of the domicile of the respondent in a contractual dispute involving individuals, the following will be taken into consideration: The habitual residence: On a subsidiary basis, the central place of business; and In the absence of any such considerations, the place where found, meaning the actual residence. When dealing with a legal entity, the determination of the domicile will be based on where the administrative headquarters have been set up. The claim plaintiff can, as an alternative, file in any of the places where the legal entity has branches, establishments, agencies or any other type of representation. Legal entities headquartered in any member state that have concluded contracts with any other member state can be sued in the courts of this latter state should there be any dispute as to the construction and implementation of the obligations regulated by contract. In the event there is a codefendant, a suit on contractual matters can be adjudicated with the courts of jurisdiction in the territory of the domicile of any of the parties to the litigation. Additionally, any claims entailing personal collateral
Collateral may refer to:
Business and finance
* Collateral (finance), a borrower's pledge of specific property to a lender, to secure repayment of a loan
* Marketing collateral, in marketing and sales
Arts, entertainment, and media
* ''Collate ...
rights or intervention of nonmember states in contractual obligations can be filed with the court hearing the main proceeding.
Counterclaims
In the event of there being a counterclaim based on any act or fact that served as the basis for the main proceeding, the courts hearing the main proceeding will be competent to hear any counterclaims that may arise.
Educational integration
Based on the premise that education is a fundamental factor in the regional integration process, educational courses at the primary or junior high level, provided that they do not entail technical studies, will be recognized by member states as being on the same level for all member nations. Likewise, to facilitate continuing education, course certificates issued by an institution accredited in one of the member states is valid in all other member states. Nontechnical primary and junior high level studies that have not been completed are accredited by any member state, thereby allowing course conclusion in another member nation. Studies are completed using an equivalency table to determine the level achieved.
Regional technical commission
A regional technical commission harmonizes mechanisms for accreditation across member nations, and resolves any situation not be covered by the equivalency table. This commission includes delegations from the ministries of education of each member nation, and meets whenever at least two member states think it necessary. Meeting sites are established on a rotating basis. Any disputes among member states as a result of application, construction, or noncompliance regarding provisions related to education are initially resolved by direct diplomatic negotiations. Should the countries not reach an accord or only partially resolve the dispute, they resort to procedures set out in the dispute resolution system. Should the member nations enter into a bilateral convention or accord with provisions more favorable to their students, the member states in question can apply whichever provisions they consider most advantageous.
Free trade zones
The member nations can have commercial free-trade zones, industrial free-trade zones, export processing zones, and special customs areas, all of which target providing merchandise marketed or produced in these areas with treatment different from that afforded in their respective customs territories. Uruguay's Vice-President Danilo Astori
Danilo Ángel Astori Saragosa (born April 23, 1940) is a Uruguayan retired social democratic politician who served as the 15th vice president of Uruguay from 2010 to 2015 under President José Mujica. A member of Uruguay Assembly– Broad Front, ...
said the issue of a free trade agreement with the United States must be dealt and that "opportunities must be built". He also said that "each Mercosur country should have a multiplicity of memberships. Mercosur must have joint international policies, an agreement on moderate protection from third parties and above all must have agreements with other trade blocks".
Tariffs
The member states can assess merchandise from these areas with the common external tariff used for Mercosur merchandise, or, in the case of certain special products, the domestic tariff prevailing in each individual state. In this way, the products from the free-trade zones can have the more favorable tax treatment established under Southern Common Market, given to the merchandise produced in the normal customs zones of each member state or, in the case of certain special products, can have the normal customs treatment prevailing in each nation. Products coming from outside of Mercosur are highly taxed so that local companies do not feel the need to compete with large international companies.
Safeguards
Products produced or marketed in the free-trade zone
A free-trade zone (FTZ) is a class of special economic zone. It is a geographic area where goods may be imported, stored, handled, manufactured, or reconfigured and re-exported under specific customs regulation and generally not subject to cus ...
s of each member nation will be eligible for the safeguard system whenever this entails an increase not provided for in imports, but capable of causing damages or threatened damages to the importer country.
Incentives
In the event of the producing nation's granting special incentives for production from the free-trade zones that are not compatible with the corresponding guidelines established under the General Agreement on Tariffs and Trade (GATT), the member nation can make any adjustments needed to return the situation to equilibrium.
Creation
The member nations agreed that any free-trade zones that in August 1994 were already in operation could operate normally under Mercosur, along with any that are set up in light of legal guidelines prevailing or in course in congress during this same time period. This means that a member nation can no longer create new free-trade zones that are more privileged.
Mercosur is an effective agreement for its members.
Manaus and Tierra del Fuego FTZs
The actual implementation of Mercosur will not affect the special Manaus, Brazil, and Tierra del Fuego
Tierra del Fuego (, ; Spanish for "Land of the Fire", rarely also Fireland in English) is an archipelago off the southernmost tip of the South American mainland, across the Strait of Magellan. The archipelago consists of the main island, Isla ...
, Argentina, free-trade zones organized in light of their special geographic situations. These two free-trade zones may continue normal operations until 2013.
Reciprocal promotion and protection
The nations subscribing to the Asunción Treaty consider that the creation and maintenance of conditions favorable to individual or corporate investment for the jurisdiction of one of the member states in the territory of another state is essential to intensify the economic cooperation targeted so as to accelerate the integration process among all four member states. In this context, Argentina, Uruguay, Paraguay and Brazil signed on 1 January 1994 in the city of Colonia del Sacramento
, settlement_type = Capital city
, image_skyline = Basilica del Sanctísimo Sacramento.jpg
, imagesize =
, image_caption = Basílica del Santísimo Sacramento
, pushpin_map = Uruguay
, subdivisio ...
, Uruguay, the Colonia Protocol for the Reciprocal Promotion and Protection of Mercosur Investments (Colonia Protocol). It was established in this protocol that investments under Mercosur by investors resident or domiciled in the territory of any member state will be entitled to treatment no less favorable than that accorded by the other member state to national investors or nonmember states.
Investors
For the purposes of constructing the Colonia Protocol, investors are considered to be: Individuals who are citizens of any of the member nations or that reside there on a permanent basis or are domiciled there, with due regard for legislation prevailing in such territory; Legal entities organized pursuant to the legislation of one of the member nations that are headquartered there; and Legal entities organized in the territory where the investment is made, actually and directly or indirectly controlled by the legal entities or individuals mentioned above.
Investment
The term investment includes all types of assets such as: movable or immovable property, such as rights in rem and guarantee in rem rights; shares, corporate holdings and any other type of corporate participation; credit instruments and rights that may have an economic value; intellectual property rights or materials, Including copyrights and industrial property
Industrial property is one of two subsets of intellectual property (the other being copyright), it takes a range of forms, including patents for inventions, industrial designs (aesthetic creations related to the appearance of industrial product ...
rights such as patents, industrial drawings, trademarks, commercial names, technical procedures, know-how and goodwill; Economic concessions involving public law, such as research, cultivation, extraction or natural resource exploration concessions.
Freedom to invest
The nation receiving the investment cannot avail itself of unjustified or discriminatory means capable of restricting the investor's freedom to manage, maintain, use, enjoy and dispose of its investments.
Tax
The member states are not however obligated to extend to investors in the other nations signatory to the Colonia Protocol the benefits of any treatment, preference or privilege resulting from international accords relating fully or partially to tax matters.
Exceptions
In addition, the member nations can temporarily establish a list of exceptions where the new treatment will not yet prevail.
In this way, the various member nations decided to except the following economic sectors:
*Argentina: ownership of real estate on the frontier strip, air transportation, naval industry, nuclear power plants, uranium mining, insurance and fishery;
*Brazil: mineral prospecting and mining; use of hydraulic energy; health care; television and radio broadcasting and telecommunications in general, acquisition or leasing of rural properties; participation in the financial intermediation
Intermediation involves the "matching" of lenders with savings to borrowers who need money by an agent or third party, such as a bank. , insurance, social security and capitalization systems; chartering and cabotage as well as inland navigation;
*Paraguay: ownership of real property on the frontier strip; communications, including radio and television broadcasting; air, sea and land transportation; electricity, water and telephone services; prospecting for hydrocarbons and strategic minerals; import and refining of petroleum derivatives and postal services;
*Uruguay: electricity; hydrocarbons; basic petrochemicals, atomic energy; prospecting for strategic minerals; financial intermediation; railways, telecommunications; radio broadcasting; press and audiovisual means.
Expropriation and compensation
The member nations undertook to do nothing to nationalize
Nationalization (nationalisation in British English) is the process of transforming privately-owned assets into public assets by bringing them under the public ownership of a national government or state. Nationalization usually refers to pri ...
or expropriate investments in their territories that pertain to investors from the signatory countries, unless such measures are taken based on public need. In such case, nothing discriminatory can be done, but everything must be implemented by due legal process. Compensation for the investment holder that is expropriated or nationalized should be both adequate and effective, and made in advance, based on the real investment value determined at the time the decision is publicly announced by the proper authorities. This payment will be updated until actual payment, and the affected investor will receive interest.
Transfers
The original member state investors will be ensured free transfer of their investments and any earnings thereon. These transfers can be made in freely convertible currency, using the exchange rate prevailing on the market pursuant to the procedures established by the member state receiving the investment. Member nations cannot adopt any exchange measures restricting free transfer of the funds invested or from activities exercised in their respective territories.
Role and potential
Some South Americans see Mercosur as giving the capability to combine resources to balance the activities of other global economic powers, especially the North American Free Trade Agreement (NAFTA) and the European Union
The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been de ...
. The organization could also potentially pre-empt the Free Trade Area of the Americas
The Free Trade Area of the Americas (FTAA) was a proposed agreement to eliminate or reduce the trade barriers among all countries in the Americas, excluding Cuba. Negotiations to establish the FTAA ended in failure, however, with all parties unab ...
(FTAA); however, over half of the current Mercosur member countries rejected the FTAA proposal at the IV Cumbre de las Américas ( IV Summit of the Americas) in Argentina in 2005.
The development of Mercosur was arguably weakened by the collapse of the Argentine economy in 2001 and it has still seen internal conflicts over trade policy, between Brazil and Argentina, Argentina and Uruguay, Paraguay and Brazil, etc. In addition, many obstacles must be addressed before the development of a common currency in Mercosur.
In 2004, Mercosur signed a cooperation agreement with the Andean Community of Nations trade bloc (CAN) and they published a joint letter of intent for future negotiations towards integrating all of South America. The prospect of increased political integration within the organization, as per the European Union
The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been de ...
and advocated by some, is still uncertain. Bolivia, also a member of CAN and an associate member of Mercosur before the UNASUR process started, plays a crucial part in relations, says Marion Hörmann, since Bolivia is traditionally seen as a mediator between the Andean countries and the rest of South America
Regional Integration: Key Role for Bolivia
The bloc comprises a population of more than 270 million people, and the combined gross domestic product of the full-member nations is in excess of US$3.0 trillion a year ( Purchasing power parity, PPP) according to International Monetary Fund
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster glo ...
(IMF) numbers, making Mercosur the fifth-largest economy in the World. It is the fourth-largest trading bloc after the European Union. The problem of economic asymmetries among the partners has been addressed by many analysts reaching dissimilar conclusions. However, there is agreement that this situation is a determining factor in characterizing the evolution of MERCOSUR.
The working of Mercosur has not met with universal approval within interested countries. Chile has to a certain extent preferred to pursue bilateral agreements with trading partners, and there have been calls from Uruguayan politicians to follow this example.
FTA with third parties
With the 2005 cooperation agreement with Mercosur, the Andean Community
The Andean Community ( es, Comunidad Andina, CAN) is a free trade area with the objective of creating a customs union comprising the South American countries of Bolivia, Colombia, Ecuador, and Peru. The trade bloc was called the Andean Pact ...
gained four new associate members: Argentina, Brazil, Paraguay, and Uruguay. These four Mercosur members were granted associate membership by the Andean Council of Foreign Ministers meeting in an enlarged session with the commission (of the Andean Community) on 7 July 2005. This move reciprocates the actions of Mercosur, which granted associate membership to all the Andean Community nations by virtue of the Economic Complementarity Agreements (Free Trade Agreement
A free-trade agreement (FTA) or treaty is an agreement according to international law to form a free-trade area between the cooperating states. There are two types of trade agreements: bilateral and multilateral. Bilateral trade agreements occ ...
s) signed between the CAN and individual Mercosur members.
Mercosur signed free trade agreements with Israel in December 2007, with Egypt in August 2010, the State of Palestine in December 2011 and Lebanon on 18 December 2014.
In 2016, Brazilian presidents, Dilma Rousseff
Dilma Vana Rousseff (; born 14 December 1947) is a Brazilian economist and politician who served as the 36th president of Brazil, holding the position from 2011 until her impeachment and removal from office on 31 August 2016. She is the first ...
and later Michel Temer
Michel Miguel Elias Temer Lulia (; born 23 September 1940) is a Brazilian politician, lawyer and writer who served as the 37th president of Brazil from 31 August 2016 to 31 December 2018. He took office after the impeachment and removal from off ...
, along with Argentine President Macri began to place pressure to negotiate a free trade agreement
A free-trade agreement (FTA) or treaty is an agreement according to international law to form a free-trade area between the cooperating states. There are two types of trade agreements: bilateral and multilateral. Bilateral trade agreements occ ...
between Mercosur and the European Union
The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been de ...
and other Latin American nations. In June 2019, the European Union–Mercosur Free Trade Agreement
The European Union–Mercosur free trade agreement is a proposed free trade agreement on which the European Union and Mercosur reached agreement in principle in 2019. The planned deal was announced on 28 June at the 2019 G20 Osaka summit after t ...
was confirmed. The bilateral trade deal opens 100 percent of EU trade and 90 percent of Mercosur trade. The deal still needs to be ratified, however.
See also
* Citizenship of the Mercosur
Citizenship of the Mercosur is granted to eligible citizens of the Southern Common Market member states. It was approved in 2010 through the Citizenship Statute and should be fully implemented by the member countries in 2021, when the program w ...
* Andean Community
The Andean Community ( es, Comunidad Andina, CAN) is a free trade area with the objective of creating a customs union comprising the South American countries of Bolivia, Colombia, Ecuador, and Peru. The trade bloc was called the Andean Pact ...
* Bolivarian Alliance for the Americas
''Alba'' ( , ) is the Scottish Gaelic name for Scotland. It is also, in English language historiography, used to refer to the polity of Picts and Scots united in the ninth century as the Kingdom of Alba, until it developed into the Kin ...
* Central American Common Market
The Central American Integration System ( es, Sistema de la Integración Centroamericana, or SICA) has been the economic and political organization of Central American states since 1 February 1993. On 13 December 1991, the ODECA countries (Spa ...
* Free Trade Area of the Americas
The Free Trade Area of the Americas (FTAA) was a proposed agreement to eliminate or reduce the trade barriers among all countries in the Americas, excluding Cuba. Negotiations to establish the FTAA ended in failure, however, with all parties unab ...
* Gaucho (currency)
* Pacific Alliance
The Pacific Alliance ( es, link=no, Alianza del Pacífico) is a Latin American trade bloc, formed by Chile, Colombia, Mexico and Peru, which all border the Pacific Ocean. The alliance was formed with the express purpose of improving regional in ...
* Union of South American Nations
The Union of South American Nations (USAN; es, links=no, Unión de Naciones Suramericanas, UNASUR; pt, links=no, União de Nações Sul-Americanas, UNASUL; nl, links=no, Unie van Zuid-Amerikaanse Naties, UZAN; French: ''Union des nations s ...
(UNASUR)
* Road Network of the MERCOSUR
* List of country groupings
Groups of countries or regions are often referred to by a single term (word, phrase, or abbreviation). The origins of such terms include political alliances, intergovernmental organizations, business market areas, and mere colloquialism.
...
* List of multilateral free-trade agreements
This is a list of multilateral free-trade agreements, between several countries all treated equally. For agreements between two countries, between a bloc and a country, or between two blocs, see list of bilateral free-trade agreements; these ar ...
* Rules of Origin
Rules of origin are the rules to attribute a country of origin to a product in order to determine its "economic nationality". The need to establish rules of origin stems from the fact that the implementation of trade policy measures, such as tari ...
* Free-trade area
A free-trade area is the region encompassing a trade bloc whose member countries have signed a free trade agreement (FTA). Such agreements involve cooperation between at least two countries to reduce trade barriers, import quotas and tariffs, and ...
* Market access
In international trade, market access is a company's ability to enter a foreign market by selling its goods and services in another country. Market access is not the same as free trade, because market access is normally subject to conditions or req ...
Notes
References
Further reading
* Arieti, Samuel A. ''The Role of MERCOSUR as a Vehicle for Latin American Integration,'' Chicago Journal of International Law
The ''Chicago Journal of International Law'' is a semiannual, student-edited law review published by the University of Chicago Law School since spring 2000. The journal publishes articles covering international law, international relations, and re ...
, vol. 6 (2005/2006), pp. 761–773.
* Gómez-Mera, Laura. "Lessons from Latin America: MERCOSUR." in ''Region-Building in Africa'' (Palgrave Macmillan, New York, 2016). 297–312.
* Luca Gardini, Gian. "Who Invented Mercosur?." ''Diplomacy and Statecraft'' 18.4 (2007): 805–830.
* Malamud, Andrés. "Presidentialism and Mercosur: a hidden cause for a successful experience." in ''Comparative Regional Integration'' (Routledge, 2018). 73–94
online
* Rivera, Salvador. ''Latin American Unification: A History of Political and Economic Integration Efforts''. (McFarland Press, 2014).
* Rivera, Salvador. "Jacob K. Javits and Latin American Economic Integration." ''Cuaderno de Negocios Internacionales e Integración.'' 13 no. 64/65 July–December 2007.
External links
*
Radio Mercosur – website and radio online
{{Authority control
Customs unions
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Development in South America
South American integration
International organizations based in the Americas
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