History of Mercosur Explained
Ashly Chole Senior Finance Researcher
History of Mercosur Table of Contents
Mercosur: South America's Economic Integration Initiative
Mercosur, or the Southern Common Market, is a regional economic integration initiative in South America. The organization was founded in 1991 and is composed of five member states: Argentina, Brazil, Paraguay, Uruguay, and Venezuela (although Venezuela's membership has been suspended since 2016).
Objectives of Mercosur
The primary objectives of Mercosur are to promote free trade and economic integration among its member states, as well as to promote political cooperation and coordination on issues of common interest.
One of the key goals of Mercosur is to eliminate trade barriers between member states, such as tariffs and non-tariff barriers. This is intended to promote greater economic growth and development within the region by facilitating trade and investment.
In addition to promoting economic integration, Mercosur also aims to foster greater political cooperation among member states. This includes coordination on issues such as security, defense, and foreign policy, as well as efforts to address social and environmental challenges facing the region.
History of Mercosur
Mercosur was founded in 1991 by the Treaty of Asuncion, which was signed by the governments of Argentina, Brazil, Paraguay, and Uruguay. The treaty established the framework for the creation of a regional free trade area, with the goal of eliminating trade barriers between member states over a period of 10 years.
Venezuela joined Mercosur as a full member in 2012, but its membership was suspended in 2016 due to concerns about the country's political situation and human rights abuses.
Structure of Mercosur
Mercosur has a number of institutions and bodies that are responsible for overseeing its activities and implementing its policies. These include:
- The Common Market Council, which is made up of the foreign ministers of member states and is responsible for setting the overall direction of Mercosur's activities.
- The Common Market Group, which is composed of senior officials from each member state and is responsible for overseeing the implementation of Mercosur's policies and decisions.
- The Mercosur Parliament, which is a legislative body made up of representatives from each member state.
- The Administrative Secretariat, which is responsible for coordinating and implementing the day-to-day activities of Mercosur.
Challenges Facing Mercosur
While Mercosur has made significant progress in promoting economic integration and political cooperation among its member states, the organization faces a number of challenges and obstacles that threaten to undermine its effectiveness and long-term viability.
One of the biggest challenges facing Mercosur is the lack of consensus among member states on a number of key issues. This includes disagreements over trade policy, as well as political and ideological differences that have led to tensions and disagreements within the organization.
In addition to these internal challenges, Mercosur also faces external pressures and challenges from other countries and international organizations. For example, the organization has faced criticism and opposition from the United States and European Union, which have accused Mercosur of not doing enough to protect intellectual property rights and maintain high environmental and labor standards.
Another challenge facing Mercosur is the growing economic and political influence of China in the region. China has become an increasingly important trading partner for many South American countries, and its growing economic presence in the region has raised concerns among some observers about the long-term impact on the economic and political sovereignty of South American countries and the potential for China to challenge the influence of traditional powers such as the United States and Europe.
Recent Developments in Mercosur
In recent years, Mercosur has faced a number of significant challenges that have threatened to undermine its effectiveness and long-term viability. For example, the organization has been criticized for its slow progress in eliminating trade barriers and promoting greater economic integration among member states.
Despite these challenges, there have been some recent developments that suggest that Mercosur may be poised for a new period of growth and cooperation. In 2020, the organization signed a new trade agreement with the European Union, which is intended to promote greater trade and investment between the two regions.
In addition to this agreement, Mercosur has also been working to strengthen its relationships with other countries and regions around the world. For example, the organization has signed free trade agreements with countries such as Israel and Egypt, and has expressed interest in exploring closer ties with other regions such as the Middle East and Africa.
In Summary
Mercosur is a regional economic integration initiative in South America that aims to promote free trade and economic integration among its member states, as well as to foster greater political cooperation and coordination on issues of common interest. While the organization has faced a number of challenges and obstacles in recent years, there are some recent developments that suggest that Mercosur may be poised for a new period of growth and cooperation.
As South America continues to play an increasingly important role in the global economy and international politics, Mercosur will likely remain an important player in the region's economic and political landscape. However, the organization will need to address its internal challenges and work to build stronger relationships with other regions and countries around the world if it is to realize its full potential and achieve its goals of promoting greater economic integration and political cooperation among its member states.