RETURN TO CONTENTS In 1991 Brazil,
Argentina, Uruguay
and Paraguay
signed the Treaty of Asuncion to create a customs union with a common
external tariff by December of 1994 that will eventually evolve into
a common market. This agreement, Mercado Comun del Sur, or MERCOSUR
was derived from integration efforts of the 1960’s. It became more intense
when Brazil and Argentina created the bilateral Programa de Integracion
y Cooperacion Argentino-Brasileno known as PICAB in 1985 which set a timetable
for a bilateral common market. Presidents Carlos Menem of Argentina
and Fernando Collor de Melo of Brazil took the initiative to speed up the
process by lowering bilateral tariffs and beginning negotiations with Paraguay
and Uruguay. MERCOSUR
was strategically oriented to develop the economies of its constituents
making them more internationally competitive so that they will not have
to rely on the closed market arena.
MERCOSUR was viewed as a remarkable development.
It brought nations with a long standing rivalries together. The MERCOSUR
constituents compose nearly half of the wealth created in all of Latin
America as well as 40 percent of the population. These four nations also
posses one third of all trade in Latin America.
Although MERCOSUR is an economic trade
initiative it was also designed with clear political goals. MERCOSUR is
committed to the consolidation of democracy and the maintenance of peace
throughout the southern cone. Also MERCOSUR took strides to reach agreements
between Brazil and Argentina in the nuclear field.
Currently there has been a move to expand MERCOSUR
with Chile and also to integrate with NAFTA,
North American Free Trade Agreement creating a Free Trade Agreement of
the Americas (FTAA),
which would dispell both NAFTA and MERCOSUR.
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