History of MERCOSUR

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 deadlines and other agreements between countries could be made. This also made that the members improved their diplomatic relations with each other. (Roett, 1999)

Mercosur (the Common Market of the South) arose in March of 1991 when Argentina, Brazil, Paraguay, and Uruguay agreed to have free circulations of goods, services, and factors of production through their borders (Lattuca, 1998). To formalize it, the treaty of Asunción was signed, which was going to be put into force since the beginning of 1995. Integrating the markets of the members almost triplicated the total exports of Mercosur’s countries. 

Recently, in June 2019, an important interregional agreement was made when Mercosur agreed to open the member markets to the EU countries’ trade. The negotiation started in early 2000, but any decision was made until this year according to LM/Agencia, 2019. 

References:

Lattuca, A., Ciuro Caldani, M. A., (1998). A estrutura organica do Mercosul in Economía Globalizada y Mercosur (pp.39-54). Buenos Aires, Argentina: Ediciones Ciudad Argentina. 

LM/Agencias, 28.06.2019 Acuerdo UE-Mercosur tras 20 años de negociaciones. Libre Mercado. Retrieved from:

Machinandiarena L. (2006). Historia del MERCOSUR: Desde su fundación hasta el año 2000. [History of Mercosur: from its foundation to the year 2000] Investigation associated to the University of CEMA. p. 4-16 Retrieved from http://www.argentinarree.com/documentos/Historia%20del%20MERCOSUR%20%20Leonor%20Machinandiarena%20de%20Devoto.pdf

Roett, R. (1999) Toward the Common Market of the South: Mercosur’s Origins, Evolution and Challenges in Mercosur: Regional Integration, World Markets (pp.7-24). Colorado, US: Lynne Rienner.