In These New Times

A new paradigm for a post-imperial world

Mercosur insight

Posted by seumasach on October 4, 2008

 

The MERCOSUR, Mercado Común del Sur, (Common Market of the South) is an ambitious economic integration project which includes the founding members Argentina, Brazil, Paraguay, Uruguay and this year Venezuela. Chile and Bolivia are associate members. Peru, Ecuador, Colombia have expressed their willingness to join the group, and Mexico has shown a growing interest.

Mercosur main objective is to increase the efficiency and competitiveness of the five economies by opening markets, promoting economic development in the framework of a globalized world, improving infrastructure and communications, making better use of   available resources, conservation of the environment, industrial complementation and coordination of macroeconomic polices. A common external tariff is one of the pillars of the block.

History and Organization

In spite of the fact that the formal launching of Mercosur occurred in March 1991 with the Asunción Treaty signed by the four original member countries, the integration spirit in the region comes from far back and has a rich experience as well as multiple bilateral complementation agreements which helped paved the way for the new advancement.  
During the sixties ALALC, (Latinamerican Free Market Association) began operating and in 1980 in a further step the original group became ALADI, Latinamerican Integration Association. Towards the end of the XXth century bilateral trade agreements proliferated among future Mercosur members, particularly Argentina and Brazil, who decided to leave aside a historical rivalry for regional leadership and embarked on economic complementation that became the founding structure for Mercosur.

Uruguay and Paraguay, strategically located between the two South American giants, followed and Montevideo was chosen as the seat for the administrative offices of Mercosur, as had been before with ALALC and ALADI.

Mercosur is ruled by the Common Market Council (CMC, Consejo del Mercado Común), which is responsible for the political decisions of the integration process. Sitting members are the five Presidents and their cabinets, who regularly meet twice a year rotating the host country.

A step below stands the Common Market Group (GMC, Grupo Mercado Común), the executive branch which is made up of the Ministers of Foreign Affairs, Ministers of Economy and  Central Banks presidents plus permanent coordinators from each member country.

GMC branches out into the Trade Commission of Mercosur which is responsible for counselling and enforcing trade policies’ instruments as well as guidelines; the Joint Parliamentary Commission in representation of elected Parliaments; the Economic and Social Consultation Forum with representatives from the different economic and social groups, and finally the Administrative Secretariat in Montevideo.

The Mercosur Parliament was officially inaugurated December 14, 2006 in Brasilia and in the first phase will have 18 representatives from each country member, nominated by local parliaments. Hopefully by 2014 it will be elected by universal, direct ballot and have some legislative powers binding the group.

Some numbers 

The five member countries hold a population of 265 million (Brazil 188 m; Argentina 40m; Paraguay 6,5m; Uruguay 3,4m and Venezuela, 28m); a total area of 12,708.970 square kilometres and a combined GDP of 930 billion US dollars at official prices.

 

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