Southern Common Market Mercosur Agreement

Mercosur`s origins are linked to discussions about the creation of a regional economic market for Latin America, which date back to the treaty that founded the Latin American Free Trade Association in 1960, which was replaced by the Latin American Integration Association in the 1980s. At that time, Argentina and Brazil made progress in this area and signed the Iguau Declaration (1985), which established a bilateral commission, followed by a series of trade agreements the following year. The Treaty on Integration, Cooperation and Development, signed in 1988 between the two countries, aims to create a common market to which other Latin American countries could join. Paraguay and Uruguay joined the process and the four countries signed the Treaty of Asuncion (1991), which founded the Common Market in 1991, a trade alliance aimed at stimulating the regional economy, displacing goods, people, workers and capital. Initially, a free trade area was established, in which signatory countries would not impose or restrict imports from other countries. From 1 January 1995, this sector became a customs union in which all signatories were able to apply the same quotas for imports from other countries (external tariffs). The following year, Bolivia and Chile were granted membership status. Other Latin American nations have expressed interest in joining the group. Since its inception, MERCOSUR has been founded on the principles of democracy and economic development, which reinforce the fundamental values of human integration.

In a closer approach to these, several agreements have been added on migration, labour, culture and social protection – to name but a few that are of the utmost importance to the inhabitants. Although Mercosur played an important role in regional economic integration in the 1990s, the bloc faced a decline in trade relations between blocs in the 2010s and political differences that hampered progress and trade liberalization. Compared to the Pacific Alliance – which includes Chile, Colombia, Mexico and Peru – Mercosur has a larger GDP: $3.500 billion compared to the Alliance`s $2.1 trillion. However, Mercosur`s growth has been much slower in recent years. Domestic trade has fallen by 3% from pre-2008 crisis levels and, since 2008, real annual GDP has increased by only 1.5%. With the 2005 cooperation agreement with Mercosur, the Andean Community has won four new associate members: Argentina, Brazil, Paraguay and Uruguay. These four Mercosur members were members of the Andean Council, which met with the Commission (the Andean Community) at an expanded meeting on 7 July 2005. This approach responds to the measures taken by Mercosur, which has granted membership to all the nations of the Andean Community under the economic complementarity agreements (free trade agreement) signed between the CAN and the various mercosur members. [55] The Caribbean country`s accession protocol was signed in 2006 by all the presidents of the bloc countries. The Uruguayan and Argentine congresses then approved the accession of the new member. The Brazilian Congress did not do so until December 2009.

However, the Paraguayan Congress did not approve it and therefore prevented the Caribbean nation from fully joining it. In response to the summary ouster of the President of Mercosur by Fernando Lugo on 29 June 2012, the Mercosur presidents have declared Paraguay`s suspension until the next presidential elections in April 2013. A month later, the bloc presidents confirmed their commitment to Venezuela. It was proposed that the decision on Paraguay`s return could be overturned by exercising its veto power, which was not the case. [22] The decision was challenged.