10/24/2014

Mercosur: South America's Fractious Trade Bloc - Council on Foreign Relations

Mercosur: South America's Fractious Trade Bloc
Authors: Joanna Klonsky, Associate Editor, Stephanie Hanson, and Brianna Lee Updated: July 31, 2012 This publication is now archived.

Introduction What is Mercosur? What are associate members? Why was Paraguay suspended as a Mercosur member? What are the implications of Venezuela joining as a full member? Does Mercosur have a political agenda? How does Mercosur affect other regional groups? How has Mercosur stimulated cooperation among its members? What are the prospects for Mercosur's future?

Introduction
Mercosur, the "Common Market of the South," is an economic and political agreement among Argentina, Brazil, Paraguay (which is currently suspended), and Uruguay to promote the free movement of goods, services and people among member states. Mercosur's primary interest has been eliminating obstacles to regional trade, such as high tariffs and income inequalities. Yet experts say Mercosur has become somewhat paralyzed in recent years, with its members divided over whether the organization should remain focused on regional trade or whether it should add political affairs to its mandate. In July 2012, Venezuela was admitted to the trade bloc as its fifth full member with complete access to the common market and voting rights, a move that some analysts say will primarily benefit Argentina and Brazil and further politicize the organization. The creation of a regional customs union in 2008, the Union of South American Nations (UNASUR), also has raised questions about Mercosur's utility. Moreover, Paraguay's 2012 suspension from the bloc has added fresh concerns about the bloc's future.

What is Mercosur? http://www.cfr.org/trade/mercosur-south-americas-fractious-trade-bloc/p12762 1/6

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Mercosur: South