MERCOSUR Southern Common Market Argentina Brazil Paraguay Uruguay

Course summary (MERCOSUR Southern Common Market)

The Mercosur (Southern Common Market) is the fourth largest economic Group in the world with a GDP of 1.989 billion U.S. dollars and a population of 242 million in 2008. Brazil is the largest economy with 79% of Mercosur's GDP, followed by Argentina with 18% to 2% for Uruguay and Paraguay with 1%.

Objectives of MERCOSUR Southern Common Market

- Free transit of production goods, services and factors between the Member states with inter alia, the elimination of customs rights and lifting of nontariff restrictions on the transit of goods or any other measures with similar effects;
- Fixing of a Common external tariff (TEC) and adopting of a common trade policy with regard to non Member states or Groups of states, and the coordination of positions in regional and international commercial and economic meetings;
- Coordination of macroeconomic and sectorial policies of member states relating to Foreign trade, agriculture, industry, taxes, monetary system, exchange and capital, services, customs, transport and communications, and any others they may agree on, in order to ensure free competition between member states; and
- The commitment by the member states to make the necessary adjustments to their laws in pertinent areas to allow for the strengthening of the integration process. The Asuncion Treaty is based on the doctrine of the reciprocal rights and obligations of the member states.

The Mercosur was created by Argentina, Brazil, Paraguay and Uruguay in March 1991 with the signing of the Treaty of Asuncion.

Associate members: Bolivia, Chile, Colombia, Ecuador and Peru. Observers: Mexico.

Adhesion of the Bolivarian Republic of Venezuela to MERCOSUR. In July 2006 it signed the Protocol of Accession of Venezuela to MERCOSUR. The entry of Venezuela to the bloc will occur gradually.

Free Trade Agreements (FTA) of MERCOSUR: Chile, Andean Community, Chile, Mexico, Peru, India , Egypt, Israel, European Union

MERCOSUR Southern Common Market initially targeted free-trade zones, then customs unification and, finally, a Common market, where in addition to customs unification the free movement of manpower and capital across the member nations' international frontiers is possible, and depends on equal rights and duties being granted to all signatory countries.

The European Union (EU)-Mercosur relationship is based on the EU-Mercosur Interregional Framework Co-operation agreement signed on 15 December 1995 in Madrid between the EC and its member states and the Mercosur and its Party States. The European Union is Mercosur's largest trading partner and the largest foreign investor in the region.

The intra-Mercosur trade tariff is 0% and a Common external tariff (CET) applies to trade with non-Mercosur countries. A Preferential Trade Agreement with India is in place, a free-trade agreement with Israel is awaiting Congress’ approval and diverse trade agreements are under negotiation with the Southern African Customs Union (SACU), countries of the Gulf Cooperation Council (GCC) and Morocco.

Web Site MERCOSUR

MERCOSUR, Southern Common Market, Argentina, Brazil, Paraguay, Uruguay, Treaty of Asuncion, European Union (EU)-Mercosur, relationship, Free transit, production goods, services, factors, Common external tariff, TEC, Common market, Master, international business