Mercosur: History, Record and Current Situation

By the end of World War II and the arrival of the Cold War, countries around the globe initiated seat treaties due to polarization of that context of technological advance, capitalism spreads, and warlike improvement. The formulation of Trading Blocs was aimed at establishing alliances between countries that long for economic advantages over other nations outside the trade. As examples of some of these treaties, there are The European Union (1957) and The G8 (1975). To prioritize their internal economies, the countries from South America also decided to take the same steps, creating in 1991 a Trading Bloc called Mercosur

During this article, you are going to learn the history of this bloc, its records, and the current situation by its 30th anniversary.

 

History

On March 26th of 1991, a South American trading bloc was set up, looking forward to a policy of benefits for the countries that were part of it: Brazil, Argentina, Paraguay, and, in 2012, Venezuela. The central idea was to give them economic autonomy from the United States and The EU, to favor their imports and exports to rise in the global market. 

Coming from a previous context of re-democratization — because of the dictatorial system that had stayed in power from the 60s to 80s —, these communities signed the "Asunción's Trade" (1991), which was responsible for facilitating economic transitions through a Customs Union, with the central objective to create a Common Market (free circulation of products and services). In 1994, the "Ouro Pretos's Protocol" set for Mercosur a recognition of international rights and the obligatory consensus between the members of the bloc. 

Venezuela's situation in this Trade Bloc has been delicate since 2016 because of two actions: its disengagement in the "Adhesion's Protocol" and in August of 2017 due to democratic violation.

 

Record

Considered the 5th economy in the world, Mercosur is divided into the Associate States — composed of all South-American countries —, Member States — the ones previously mentioned —, and Bolivia, which is considered a possible future official Member State and in the process of joining. Associate members do not have the right to vote in the most decisive decisions and they can't participate in all meetings. 

Mercosur's basic data are: the Founder States + Venezuela represents 72% of the entire South-America territory (3 times bigger than the UE area), 76.2% of GDS (Gross Domestic Product) according to the World Bank, and 69.5% of the South America population (approximately 288.5 million people).

The bloc is also responsible for 63% of world soybeans sales and it is the principal global exporter of beef and chicken meat, corn, coffee, and iron, as well as the eighth-largest producer of automobiles. 

 

30th anniversary

Last March 26th, Mercosur celebrated its 30th anniversary, although that meeting wasn't cheerful at all. 

Because of the Covid Pandemic, the usual ceremony was taken online by the presidents of Brazil (Jair Bolsonaro), Argentina (Alberto Fernandés), Uruguay (Luis Lacalle Pou), and Paraguay (Miguel Abdo Benítez). A tension was established when Alberto Fernandés reprimand his colleagues who were asking for more flexibility in the bloc which refers to common external tariff and prohibition to set economic deals independent from Mercosur, without asking authorization from the other members. The president of Argentina declared: "if this load is too heavy, it's easier to abandon the boat" in response to the pronounce of Lacalle Pou, the one who said that Mercosur couldn't be a “burden” that prevents the commercial rise of his country and that the deal with the UE bloc “is loading for so long", that's why they propose a flexibilization.

globe with mask Photo by Anna Shvets from Pexels

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The article above was edited by Giulia Lozano Pacini.

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