Mercosur
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Mercosur or Mercosul (Spanish: Mercado Común del Sur, Portuguese: Mercado Comum do Sul, Guarani: Ñemby Ñemuha, English: Southern Common Market) is a Regional Trade Agreement (RTA) among Argentina, Brazil, Paraguay and Uruguay founded in 1991 by the Treaty of Asunción, which was later amended and updated by the 1994 Treaty of Ouro Preto. Its purpose is to promote free trade and the fluid movement of goods, people, and currency.
Mercosur/Mercosul origins trace back to 1985 when Presidents Raúl Alfonsín of Argentina and José Sarney of Brazil signed the Argentina-Brazil Integration and Economics Cooperation Program or PICE (Spanish: Programa de Integración y Cooperación Económica Argentina-Brasil, Portuguese: Programa de Integração e Cooperação Econômica Argentina-Brasil). [1]
Bolivia, Chile, Colombia, Ecuador and Peru currently have associate member status. Venezuela signed a membership agreement on 17 June 2006, but before becoming a full member its entry has to be ratified by the Paraguayan and the Brazilian parliaments.
The founding of the Mercosur Parliament was agreed at the December 2004 presidential summit. It should have 18 representatives from each country by 2010.[2]
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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 organization could also potentially pre-empt the Free Trade Area of the Americas (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. However, development of the Union of South American Nations seems to suggest that the countries of South America are not opposed to regional integration but merely wary of the United States-backed FTAA.
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. The free movement of individuals has been a matter of practical controversy. In addition, many obstacles are to be addressed before the development of a common currency in Mercosur[3].
In December 2004 it signed a cooperation agreement with the Andean Community trade bloc (CAN) and they published a joint letter of intention for a future negotiations towards integrating all of South America. The prospect of increased political integration within the organization, as per the European Union and advocated by some, is still uncertain.
The bloc comprises a population of more than 263 million people, and the combined Gross Domestic Product of the full-member nations is in excess of US$2.78 trillion a year (Purchasing power parity, PPP) according to International Monetary Fund (IMF) numbers, making Mercosur the fifth largest economy in the World.
FTA with third parties
Recently, with the new cooperation agreement with Mercosur, the Andean Community 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 Agreements) signed between the CAN and individual Mercosur members. [4]
On 30 December 2005 Colombian president Álvaro Uribe signed a law that ratifies an FTA with Mercosur and gives Colombian products preferential access to a market of 230 million people. Colombian entrepreneurs will also be able to import materials and capital goods from Mercosur at lower costs due to reduced tariffs resulting from the agreement.
The agreement's asymmetry clauses favor Colombia because it allows the gradual and progressive reduction of tariffs and likewise gives Colombia the opportunity to gradually reform its production system to adapt it to the requirements of the future negotiations within the scheme of Mercosur and the Union of South American Nations.
On December 18 2007, Mercosur signed a free trade agreement with Israel in Uruguay. [5] [6]
Venezuela
Venezuela applied for membership, but its entry hasn't been ratified by Paraguay nor Brazil, although it was ratified by Argentina and Uruguay.[7] In May 2007, the Brazilian Senate asked Venezuela to reconsider the non-renewal of RCTV's license, an oppositionist television network. President Hugo Chávez responded accusing the Brazilian Congress of being subservient to interests of the United States. [8] The leader of the Brazilian Social Democracy Party in the Senate, senator Arthur Virgílio, stated that the party will try to prevent Venezuela's entry in Mercosur.
Members
The following countries are full members, in the process of becoming full members, associate members or observers.[9]
Full members
Becoming full members
Associate members
Observers
See also
- Andean Community
- Central American Common Market
- Customs Union
- Bolivarian Alternative for the Americas
- Free Trade Area of the Americas
- Trade bloc
- Union of South American Nations
Further reading
- Samuel A. Arieti, The Role of MERCOSUR as a Vehicle for Latin American Integration, Chicago Journal of International Law, vol. 6 (2005/2006), pp. 761-773.
References
- ↑ Official Site of the Argentinian Subsecretary for Political and Commercial Management (Spanish)
- ↑ Reuters AlertNet - Mercosur parliament starts on sour note
- ↑ Hardman Reis, T. "Aspectos Jurídicos da Criação de um sistema monetário para o Mercosul", Hardman Reis e Gomes Eduardo (Coord.) Globalização e Comércio Internacional no Direito da Integração, 2005, São Paulo, Ed. Lex/Aduaneiras, p. 235
- ↑ [1]
- ↑ "Mercosur signs first out of region trade accord with Israel", Mercopress. Retrieved on 2007-12-21. Archived from the original on 2007-12-21.
- ↑ "Mercosul-Israel Free Trade Agreement", Brazilian Embassy in Washington. Retrieved on 2008-02-21.
- ↑ Bragon, Ranier; Andreza Matais (2007-09-22), "Folha de São Paulo", A Chávez, governo prevê aprovação neste ano, São Paulo, São Paulo: Folha da Manhã S.A., p. A10
- ↑ Bragon, Ranier; Andreza Matais (2007-09-22), "Folha de São Paulo", Congresso brasileiro reage a fala de Chávez, São Paulo, São Paulo: Folha da Manhã S.A., p. A10
- ↑ Mercosur summit ends, commits to Venezuela membership, reducing asymmetry, People's Daily Online, 2007-12-19
- ↑ Osava, Mario; Marcela Valente (Argentina), David Vargas (Paraguay), Darío Montero (Uruguay) and Humberto Márquez (Venezuela) (2008-01-04). "CHALLENGES 2007-2008: Mercosur Limps Slowly Along", Inter Press Service. Retrieved on 2008-01-04. Archived from the original on 2008-01-04. "But Venezuela’s entry ... is still awaiting ratification by the Brazilian and Paraguayan parliaments. The general elections scheduled in Paraguay for April 2008 are an additional factor of uncertainty."
External links
- Mercosur Official Website
- BBC - S America Creates Single Market
- Council on Foreign Relations: Mercosur: South America’s Fractious Trade Bloc
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