OAS: Mercosur

This blog was created by Telma Nzams, Judit Vico and Isabella Palmieri from 101 seminar. This blog and the following post are related to the Southern Common Market, also known as MERCOSUR. It is going to explain its origins and historical background, as well as the original and current characteristics of it; mainly the geographical, economic and political features. It is also going to compare the differences and similarities between this regional organisation and others from the same continent. Besides, the several concepts of a region that may be applied when people talk about this region and its differences. Acronyms MERCOSUR: Mercado Común del Sur ( Southern Common Market)  LAFTA: The Latin American Association UNASUR: The South American Union of Nations LACM: Latin America Common Market GRAN: Grupo Andino (Andean Group)  CAFTA: Central American Free Trade CMC: Common Market Council  CMG: Common Market Group GDP: Gr...

Mercosur was created in 1991 and is nowadays a consolidated regional organization. It has its origins in a previous organization: Asociación Latinoamericana de Libre Comercio or ALALC, in which eleven countries of South America were members. Its main goal was to create an area where the members (Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay, and Venezuela) could trade freely in an approximated period of twelve years. However, the economic instability in the region and the lack of institutions for the purpose of integration stalled the process (Machinandiarena, 2006).   Due to this failure, members of ALALC met and negotiated the Montevideo treaty in 1980, which led to a second organization: Asociación Latinoamericana de Integración or ALADI. Its main goal was to integrate the markets of the different members to establish a common one. Nevertheless, the difference with the later tries in making this were that there were no strict d...

MERCOSUR is a regional integration process that has its origins in the signing of the Treaty of Asunción, on March 26, 1991. This agreement was signed by the Argentine Republic, the Federal Republic of Brazil, the Republic of Paraguay and the Eastern Republic of Uruguay, which are the main states part of the organization (MERCOSUR, 2015). Its foundational goals were to boost the global economic growth of the area, to improve resource allocation and to increase the welfare of citizens of member countries (UNED Documentos, 2005). Likewise, the Treaty of Asunción tried the implementation of automatic tariff reductions among these members countries, and promoted several measures to achieve mainly the trade liberalization (Roett, R., 1999); these measures promoted the free circulation of goods, people, services, and capital, just as the establishment of a common external tariff, the creation of a common commercial policy, the coordination of macroeconomic and sectoral policies between...

The founding members of this region were Brazil, Paraguay, Uruguay, and Argentina. In December 2013 Venezuela was later recognized as a full member. However, due to human rights violations in Venezuela, it has been suspended of its participation since 2016.  Bolivia began the process to become a state member in 2015. (MERCOSUR, 2015) Also, only those members of ALADI may apply for such “accession” to the Treaty of Asunción (i.e. as a full member), and for that purpose, they must submit a written request to the Common Market Council. (Fernández Reyes, J. A., 2013) Besides, there are other kinds of states called “associated states” which are those ALADI members that have MERCOSUR free trade agreements and they are being considered as associated members. They are allowed to participate in MERCOSUR meetings which are about topics of common interest. Likewise, the associated states may also be those countries with which MERCOSUR concludes agreements under Article 25 of the 1980...

The countries members of MERCOSUR represent 70% of the South-American territory (UNED Documentos, 2005), just as its surface is about 15 million km2. Currently, counting Venezuela as a member, the total population of the organization is about 295.000.000 inhabitants of which 10.533.000 are young people aged between 15-17 years old.  (MERCOSUR, 2014) However, if it counts Bolivia as a member in the process, the total population would be of 304,754,969 inhabitants. (Country Economy, n.d.) Regarding the landscape and natural features, the maritime borders of MERCOSUR are the North-Atlantic Ocean with Brazil, the Caribbean Sea with Venezuela, and the South-Atlantic Ocean with part of Brazil, Uruguay, and Argentina.    ( RT, 2015 ) The followed image shows the member states with their current population and current land place. (RT, 2015) Moreover, the followed image shows in Spanish the natural resources of some countries members have, just as the...

Regarding the political features, there are differences in the political relations between the members and the applied policies depending on the period of the organization. During the transition period (1991-1994) there were some broken rules between the members, mainly between Argentina and Brazil due to the first one accumulated growing trade deficits with Brazil, whose political consequences tried to be administered with a flexible approach, for example, Brazil accepted the rise of statistical rate from Argentina from 3% to 10%, which was banned on the Treaty of Asunción. During the consolidation period (1995-1998), as known as “markets era”, there were several contrasts between the policies taken by some members; there was a sustained increase in economic interdependence, a widening gap between the commitments adopted and their effective implementation, as well as a negative politicization since the press interpreted that some member states were driven only by their interests and...

Regarding the economic features, in the first place, MERCOSUR uses an integration strategy called " open regionalism " which is based on seeking to increase integration with neighboring countries, also aiming to eliminate or reduce barriers to integration with the rest of the world. (Zona Económica, n.d.) Regarding the economic features, in the first place, the total annual GDP of MERCOSUR in 2018 was 2,627,535M.$, being the Brazil GDP the greater than the rest of members with a 1,867,818M.$. Likewise,  the total GDP per capita in the same year was 8,622$ (Country Economy, n.d.) At the beginning of MERCOSUR, in 1995, Brazil accounted for about 70% of the total GDP of Mercosur, because its economic performance, domestic policies, and negotiating position within the bloc, which had a major impact on the overall development of the integration process, methodology, and agenda. (Roett, R., 1999). Moreover, the followed table shows the real GDP of all South-America, in 2018 a...