The Mercosur or Southern Common Market (in Spanish it is written Mercosur – Mercado Común del Sur ) is an economic bloc that was created in 1991, with the signing of the Treaty of Asunción . This bloc is composed of the following members:Brazil, Argentina, Uruguay, Paraguay and Bolivia. Venezuela is the sixth member of Mercosur, but has been suspended since 2016.
Emergence
The creation of Mercosur is part of a context in which South American nations debated possibilities regarding an organization that would promote regional economic integration. The initial step towards the creation of Mercosur is considered to be the economic agreement made between Brazil and Argentina, starting with the Declaration of Iguaçu, in 1985.
Mercosur was officially founded in 1991, when Brazil and Argentina signed the Treaty from Assumption . This treaty was joined by Paraguay and Uruguay . The agreement signed between the four countries aimed to create a trade alliance zone with the objective of expanding the movement of people and goods between the nations that make up the bloc.
Initially, Mercosur established a free trade zone among its four members, that is, a zone in which taxes on goods exported and imported within the bloc were abolished. Subsequently, this framework was reverted to a customs zone, in which partner nations agree to standardize the customs tariffs that are charged.
As we have seen, Mercosur was initially created by four nations:Brazil, Argentina, Uruguay and Paraguay. Some time later, Venezuela showed interest in joining the bloc as a full member. The country's entry was debated among member countries for a few years and made official in 2004. Brazil only recognized Venezuela's entry in 2009, after approval by the Senate.
Venezuela, however, is suspended of Mercosur since 2016 by joint determination of the member countries. According to the bloc's representatives, the suspension was motivated by the rupture of the democratic process in that country. Currently, Venezuela is in a strong economic and political crisis, a result of the authoritarian practices of the administration of Nicolás Maduro (current president of Venezuela), considered a dictatorship by experts and international observers. Venezuela's suspension was made official at a meeting held by representatives of Brazil, Argentina, Uruguay and Paraguay.
Another country that fought to secure entry into the South American economic bloc was Bolivia , which was officially accessed in July 2017. As explained by the Mercosur representatives, Bolivia is in the accession process to the block, something that can span a period of four years|1| .
Mercosur also has associate members, who have access to some of the economic agreements implemented by the bloc, but who do not have the right to vote at meetings. Chile, Peru, Ecuador and Colombia are some of these associates.
Characteristics of Mercosur
In 1991, when Mercosur was created, one of the initial objectives was to expand trade between South American nations. In this sense, the bloc was quite successful, especially in the relationship between Brazil and Argentina, which have since become major economic partners.
In data released by the Brazilian government|2| On the trade balance in 2017, Argentina was Brazil's third largest buyer and also the third country from which Brazil imported the most goods. Altogether, Argentina was responsible for 8.09% of all Brazilian exports, and 6.26% of our imports were Argentine goods. These data make Argentina Brazil's largest economic partner in all of Latin America.
Mercosur, during its creation, stipulated some perspectives to be gradually structured in member countries, such as:
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Defining a single currency;
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Implementation of a free trade zone;
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Permission for workers to work without restrictions in any of the member countries;
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Economic integration;
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Educational development aimed at cultural integration of countries.
|1| Bolivia joins Mercosur. To access, click here.
|2| Trade balance:January-December 2017. To access, click here.
*Image Credits:Rosalba Motta-Machado and Shutterstock