![]() ![]() Asuncion’s suspension took away its ability to block Caracas. Some experts say Paraguay’s suspension, which was lifted in 2013, was politically motivated, since Brazil was seeking Venezuela’s admission to the bloc and Paraguay’s new, center-right government opposed it. Mercosur members invoked the protocol for the first time in 2012 to suspend Paraguay, claiming that President Fernando Lugo had been removed from power unfairly after his domestic opponents accused him of mishandling a deadly clash between farmers and law enforcement. One of Mercosur’s early aims was to cement the region’s return to democracy. In 1998, the group signed the Ushuaia Protocol on Democratic Commitment, stating that “the full force of democratic institutions is essential” to the integration of Mercosur states and that a “rupture in democratic order” would be cause for a member’s suspension. One of Mercosur’s early aims was to cement the region’s return to democracy, since all of its founding members had emerged from dictatorships in the 1980s. Bolivia was invited to join as a full member in 2012, but its accession is pending authorization from Brazil’s congress. They receive tariff reductions when trading with the full members but do not enjoy full voting rights or free access to their markets. The bloc “is less about opening up but actually about protecting Brazilian and Argentine industries from global competition,” says Oliver Stuenkel, an assistant professor at the Getulio Vargas Foundation in Sao Paulo.īolivia, Chile, Colombia, Ecuador, Guyana, Peru, and Suriname are associate members. Some critics say Argentina and Brazil wanted Mercosur simply as a trade shield. The pair still loom large over Mercosur: together they account for about 95 percent of both the bloc’s GDP and population. Mercosur was created in large part to cement a rapprochement between Argentina and Brazil, whose relationship had suffered early on from a competition for regional dominance and mutual distrust of their economic and diplomatic agendas. By contrast, Latin America’s second-largest trade group, the Pacific Alliance, which comprises Chile, Colombia, Mexico, and Peru, has a combined GDP of about $1.8 trillion. The four have a combined gross domestic product (GDP) of roughly $2.9 trillion, making it one of the world’s largest economic blocs. Venezuela joined Mercosur’s four founding countries as a full member in 2012, but was suspended in late 2016. Other bodies include the Common Market Group, which coordinates macroeconomic policies a trade commission a parliament, known as Parlasur, which serves an advisory role and the Structural Convergence Fund (FOCEM), which coordinates regional infrastructure projects. ![]() The group’s presidency rotates every six months among its full members, following alphabetical order. The bloc’s highest decision-making body, the Common Market Council, provides a high-level forum for coordinating foreign and economic policy. In 1994, the group signed the Protocol of Ouro Preto, formalizing its status as a customs union. Residents of the bloc are authorized to live and work anywhere within it. “It was going to be a customs union with a political side.” The Mercosur stamp is emblazoned on member countries’ passports, and license plates display the Mercosur symbol. “Mercosur had grand ambitions,” says CFR Senior Fellow Shannon K. ![]() The charter members hoped to form a common market similar to that of the European Union, and even considered introducing a common currency. Mercosur was created in 1991 when Argentina, Brazil, Paraguay, and Uruguay signed the Treaty of Asuncion, an accord calling for the “free movement of goods, services, and factors of production between countries.” The four countries agreed to eliminate customs duties, implement a common external tariff (CET) of 35 percent on certain imports from outside the bloc, and adopt a common trade policy toward outside countries and blocs. Mercosur revived long-stalled trade talks with the European Union in 2017, and there was hope in late 2018 that they could reach a landmark deal. Mercosur’s one-year suspension of Paraguay in 2012 and indefinite suspension of Venezuela in 2016 have revealed fractures within the group. In recent years, other experts have questioned the bloc’s commitment to democracy. ![]() However, many experts say Mercosur has since failed to live up to its ambitions of integrating the region. Created during a period when longtime rivals Argentina and Brazil were seeking to improve relations, the bloc saw some early successes, including a tenfold increase in trade within the group in the 1990s. Mercosur is an economic and political bloc comprising Argentina, Brazil, Paraguay, Uruguay, and Venezuela. ![]()
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