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Mercosur - The Common Market of the South
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Treaty of Asunción The creation of Mercosur, an economic bloc in existence since January 1995, set up a Customs Union between Brazil, Argentina, Uruguay and Paraguay. The accord does not represent isolated diplomatic action but is the result of a long process of drawing together the member-countries. The creation of the Latin American Free Trade Association in 1960, to be superseded by the Latin America Association of Integration, in 1980, and the process of integration between Brazil and Argentina that began with the signing of the Accord for Argentine-Brazilian Integration in 1986, all constitute relevant antecedents for the block's implementation process. The Treaty of Assunción, signed by Brazil, Argentina, Paraguay and Uruguay on March 26th, 1991 is the legal document that forms the basis of Mercosur. As a result of the legal documents provided for under the Treaty, around 95% of intra-Mercosur trade is currently being carried on free of tariff barriers, a position that should apply to all intra-regional trade by the year 2000. The Common Foreign Tariff is specified for practically all the Mercosur tariff area, with widespread implementation since January 1st, 1995. By 2006, with the termination of the period of ascending or descending convergence of the national tariffs that are still excluded, the Foreign Common Tariff will be used for all the tariff area.
Mercosur today is an economic reality of continental dimensions. Comprising an area of slightly less than 12 million square kilometers, or more than four times the size of Europe, Mercosur represents a potential market of 200 million people and a joint GDP of more than US$ 1 trillion, which places it among the four largest economies of the world after NAFTA, the European Union and Japan. Mercosur is currently one of the major poles of attraction for investment in the world. There are many reasons for this success: Mercosur is the fourth economy and has the largest reserve of natural resources in the world. Its energy reserves, especially mineral and hydroelectric, are among the most important in the world. Its advanced communications network goes through a continuous renovation process. More than two million kilometers of roads connect our major cities and our people travel through more than six thousand airports. The future perspectives in the communications sector are extremely promising: Now that the major companies in the sector have become privatized, a much greater market can be exploited. Today Mercosur has one of the most important industrial sectors among the developing countries, larger in fact than many of the so-called "developed" countries. The economic performance of the subregion has shown that Mercosur today is one of the most dynamic economies in the world. Our average rate of growth for the 1991/98 period, roughly 3.5%, was considerably higher than the world average. Another factor added to these figures is stability. In the Mercosur of today, inflation is merely an unpleasant memory. Mercosur today is a global trader and, as such, is fully interested in maintaining broad and varied relations with the outside world. Its four member countries are constantly concerned about maintaining their position in global trade, without favoring one or another country, in order to ensure a broader scope to its role on the international scene. Its imports and exports are distributed in a balanced way among the diverse economies of the world. In this sense it is natural for Mercosur to practice and respect the principles of open regionalism since it was originally conceived precisely to increase the participation and improve the position of its four economies in the world market. On Mercosur's foreign agenda, which includes initiatives within the Latin American spheres, both hemispheric and extra-hemispheric, the following topics are top priority:
a) the negotiation of free trade agreements between Mercosur and the
other members of the Latin American Association of Integration;
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The present configuration of Mercosur is set down in its constitutional
framework, the Ouro Preto Protocol, signed by the four countries in
December, 1994. The Protocol recognizes the legal existence of the bloc
under international law, ascribing it with the authority to negotiate,
on its own behalf, agreements with third party countries, groups of
countries and international organizations. Nowadays, verified the
juridical compatibility of Mercosur with the Latin American Association
of Integration and with GATT, the commercial success of integration and
the fact of being a body that has legal status serve to ensure its
position as an economic partner with relevance on the international
plane.
