Mercosur

Mercosur

Official name: Mercado Comum do Sul (Portuguese) Mercado Común del Sur (Spanish) Mercosul states   Member   Associate member   Observer
Official Languages	Portuguese, Spanish and Guaraní
Members	Argentina (1991) Brazil (1991) Paraguay (1991) Uruguay (1991) Venezuela (2006)2
Associate Members	Bolivia (1997) Chile (1996) Colombia (2004) Ecuador (2004) Peru (2003)
Observer	Mexico (2004)3
President	Carlos Chacho Álvarez
Seat of Secretariat	Montevideo
Area  - Total	Arround 13.000.000 km² 2th1
Population  - Total (2007) -with associate members	266.600.000 4th1 365.600.000
GDP  - Total (2006) -with associate members	U$ 2.236.611 5th1 U$ 2.970.543
GDP per capita -with associate members	U$ 7.950 U$ 6.996
IDH	0,809 (high)
Formation	26 march 1991
Time zone	UTC -2 to -5
Official website	http://www.mercosur.int/
1If considered as a single entity 2Former Associate member 3in process of becoming an associate member

Mercosur or Mercosul (Spanish: Mercado Común del Sur, Portuguese: Mercado Comum do Sul, English: Southern Common Market) is a Regional Trade Agreement (RTA) between Brazil, Argentina, Uruguay, Venezuela, and Paraguay, 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, peoples, and currency.

Mercosur 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).

Bolivia, Chile, Colombia, Ecuador and Peru currently have associate member status. Venezuela signed a membership agreement on 17 June 2006, and became a full member on July 4. The organization has a South and Central America integration vocation.

Role and potential

Some South Americans see Mercosur as giving the capability to combine resources to balance the activities of other global economic powers, perhaps especially the United States 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 South American Community of 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, as Argentina unilaterally charges a 5 Pesos fee from Mercosur citizens going through the country.

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 [1], and the combined Gross Domestic Product of the member nations is larger than 2.42 trillion dollars a year (PPP) according to World Bank 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. ^[2]

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 South American Community of Nations.

See also

• Trade bloc
• Andean Community
• South American Community of Nations
• Customs Union

External links

• BBC - S America Creates Single Market
• Mercosur on SICE/OAS site