Mercosur

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Mercosur

Mercosur or Mercosul ( , ) is a Regional Trade Agreement (RTA) among Argentina

Argentina

Argentina, officially the Argentine Republic , is a country in South America, constituted as a federation of 23 provinces and an autonomous city....
, Brazil

Brazil

Brazil , officially the Federative Republic of Brazil , is a country in South America. It is the List of countries and outlying territories by total area country by geographical area, occupying nearly half of South America, the List of countries by population country, and the fourth most populous democracy in the world....
, Paraguay

Paraguay

Paraguay, officially the Republic of Paraguay , is one of the only two landlocked countries in South America . It lies on both banks of the Paraguay River and is bordered by Argentina to the south and southwest, Brazil to the east and northeast, and Bolivia to the northwest....
and Uruguay

Uruguay

Uruguay is a country located in the southeastern part of South America. It is home to 3.46 million people, of whom 1.7 million live in the capital Montevideo and its metropolitan area....
founded in 1991 by the Treaty of Asunción

Treaty of Asunción

The Treaty of Asunci?n was a treaty between the countries of Argentina, Brazil, Paraguay, and Uruguay signed on March 26, 1991. The objective of the treaty, signed in Asunci?n, was to establish a common market among the participating countries, popularly called Mercosur ....
, 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 origins trace back to 1985 when Presidents Raúl Alfonsín

Raúl Alfonsín

Ra?l Ricardo Alfons?n is an Argentina politician and statesman, who was the President of Argentina from December 10, 1983 to July 8, 1989....
of Argentina and José Sarney

José Sarney

Jos? Ribamar Ferreira de Ara?jo Costa Sarney, , is a Brazilian writer and politician. He served as president of Brazil from March 15, 1985 to March 15, 1990....
of Brazil signed the Argentina-Brazil Integration and Economics Cooperation Program or PICE (Spanish

Spanish language

Spanish or Castilian is a Romance languages that originated in northern Spain, and gradually spread in the Kingdom of Castile and evolved into the principal language of government and trade....
: Programa de Integración y Cooperación Económica Argentina-Brasil, Portuguese

Portuguese language

Portuguese is a Romance language that originated in what is now Galicia and Portugal. It is derived from the Latin language spoken by the Romanization Pre-Roman peoples of the Iberian Peninsula around 2000 years ago....
: Programa de Integração e Cooperação Econômica Argentina-Brasil).

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Mercosur or Mercosul ( , ) is a Regional Trade Agreement (RTA) among Argentina

Argentina

Argentina, officially the Argentine Republic , is a country in South America, constituted as a federation of 23 provinces and an autonomous city....
, Brazil

Brazil

Paraguay

Uruguay

Treaty of Asunción

Raúl Alfonsín

Ra?l Ricardo Alfons?n is an Argentina politician and statesman, who was the President of Argentina from December 10, 1983 to July 8, 1989....
of Argentina and José Sarney

José Sarney

Spanish language

Portuguese language

Bolivia

The Republic of Bolivia , named after Sim?n Bol?var, is a landlocked country in central South America. It is bordered by Brazil on the north and east, Paraguay and Argentina on the south, and Chile and Peru on the west....
, Chile

Chile

Chile, officially the Republic of Chile , is a country in South America occupying a long and narrow coastal strip wedged between the Andes mountains and the Pacific Ocean....
, Colombia

Colombia

Colombia , officially the Republic of Colombia , is a country in north-western South America. Colombia is bordered to the east by Venezuela and Brazil; to the south by Ecuador and Peru; to the north by the Caribbean Sea; to the north west by Panama; and to the west by the Pacific Ocean....
, Ecuador

Ecuador

Ecuador , officially the , literally, "Republic of the equator") is a representative democratic republic in South America, bordered by Colombia on the north, by Peru on the east and south, and by the Pacific Ocean to the west....
and Peru

Peru

Peru , officially the Republic of Peru , is a country in western South America. It is bordered on the north by Ecuador and Colombia, on the east by Brazil, on the southeast by Bolivia, on the south by Chile, and on the west by the Pacific Ocean....
currently have associate member status. Venezuela

Venezuela

Venezuela , officially the Bolivarian Republic of Venezuela , is a country on the northern coast of South America.The country comprises a continental mainland and numerous islands located off the Venezuelan coastline in the Caribbean Sea....
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

Mercosur Parliament

The Mercosur Parliament is a Mercosur body in which each member gets 18 representatives. According to Eduardo Fel?cio, "Initially, the 18 representatives will be nominated; elections are envisaged for later on."...
was agreed at the December 2004 presidential summit. It should have 18 representatives from each country by 2010.

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

North American Free Trade Agreement

The North American Free Trade Agreement is a trilateral trade bloc in North America created by the governments of the United States, Canada, and Mexico....
(NAFTA) and the European Union

European Union

The European Union is an economic and political union of 27 European Union member state, located primarily in Europe. It was established by the Treaty of Maastricht on 1 November 1993 upon the foundations of the pre-existing European Economic Community....
. The organization could also potentially pre-empt the Free Trade Area of the Americas

Free Trade Area of the Americas

The Free Trade Area of the Americas was a proposed agreement to eliminate or reduce the trade barriers among all countries in the Americas but Cuba....
(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

Mar del Plata Summit of the Americas

The seaside resort of Mar del Plata, in the , about 400 km southeast of Buenos Aires, was the venue of the Fourth Summit of the Americas between 4 November and 5 November, 2005....
) in Argentina in 2005.

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, Mrs.Pirillo etc. In addition, many obstacles are to be addressed before the development of a common currency in Mercosur.

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

Gross domestic product

File:GDP nominal per capita world map IMF 2008.pngThe gross domestic product or gross domestic income is one of the measures of national income and output for a given country's economy....
of the full-member nations is in excess of US$2.78 trillion a year (Purchasing power parity

Purchasing power parity

The purchasing power parity theory uses the long-term equilibrium exchange rate of two currencies to equalize their purchasing power. Developed by Gustav Cassel in 1920, it is based on the law of one price: the theory states that, in ideally efficient markets, identical goods should have only one price....
, PPP) according to International Monetary Fund

International Monetary Fund

The International Monetary Fund is an international organization that oversees the global financial system by following the macroeconomic policies of its member countries, in particular those with an impact on exchange rates and the balance of payments....
(IMF) numbers, making Mercosur the fifth largest

List of countries by GDP (PPP)

There are three lists of countries of the world sorted by their gross domestic product . The GDP dollar estimates given on this page are derived from purchasing power parity calculations....
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.

On 30 December 2005 Colombian president Álvaro Uribe

Álvaro Uribe

?lvaro Uribe V?lez Before his current role in politics Uribe was a lawyer. He studied law at the University of Antioquia and completed a management course at Harvard University....
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.

Venezuela

Venezuela applied for membership, but its entry hasn't been ratified by Paraguay nor Brazil, although it was ratified by Argentina and Uruguay. In May 2007, the Brazilian Senate asked Venezuela to reconsider the non-renewal of RCTV

RCTV

Radio Caracas Televisi?n Internacional is a Venezuelan Cable television television Television network headquartered in the Caracas, Venezuela neighborhood of Quinta Crespo....
's license, an oppositionist television network. President Hugo Chávez responded accusing the Brazilian Congress of being subservient to interests of the United States. The leader of the Brazilian Social Democracy Party

Brazilian Social Democracy Party

The Brazilian Social Democracy Party is a political party in Brazil. Its mascot symbol is a blue and green colored toucan and its election code is 45....
in the Senate, senator Arthur Virgílio, stated that the party will try to prevent Venezuela's entry in Mercosur.

On December 18 2008, the Brazilian Chamber of Deputies

Chamber of Deputies of Brazil

The Chamber of Deputies of Brazil is a federal legislative body and the lower house of the National Congress of Brazil. As of 2006, the chamber comprises 513 deputies, who are elected by proportional representation to serve four-year terms....
approved by 265 votes, 61 against and 6 abstentions, Venezuela's bid for membership in Mercosur. The bill was forwarded to the Brazilian Senate

Senate of Brazil

In its present configuration, the Brazilian Federal Senate is a federal legislative body and the upper house of the National Congress of Brazil....
, where it is expected to be incorporated to the agenda by late February 2009.

On March 4 2009, the External Relations Commission of the Paraguayan Chamber of Senators

Senate of Paraguay

The Chamber of Senators of Paraguay , the upper house of the Congress of Paraguay, has 45 members, elected for a five year term by proportional representation....
could not approve a recommendation for Venezuela's bid for membership in Mercosur. The bill has to be reviewed again, but there is no specific date in the agenda.

Members

The following countries are full members, in the process of becoming full members, associate members or observers.

Full members

Argentina

Argentina, officially the Argentine Republic , is a country in South America, constituted as a federation of 23 provinces and an autonomous city....
Brazil

Brazil

Paraguay

Uruguay

Uruguay is a country located in the southeastern part of South America. It is home to 3.46 million people, of whom 1.7 million live in the capital Montevideo and its metropolitan area....

Becoming full members

Venezuela

Associate members

Bolivia

Chile

Chile, officially the Republic of Chile , is a country in South America occupying a long and narrow coastal strip wedged between the Andes mountains and the Pacific Ocean....
Colombia

Colombia

Ecuador

Peru

Observers

Mexico

The United Mexican States , commonly known as Mexico , is a federalism constitutionalism republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of Mexico....

Mercosur

Role and potential

FTA with third parties

Venezuela

Members

Full members

Becoming full members

Associate members

Observers

See also

Further reading

External links