What Is Mercosur

This collection of essays aims to contribute to our understanding of the process of regional integration currently underway in South America. Mercosur is a regional manifestation of a world-wide process of globalisation whose driving force is economic, but which is potentially much more than that. It involves a variety of political, social and cultural processes, some of them barely at an embryonic stage, though each advancing at its own rate of progress. Mercosur's neo-liberal matrix, however, has led to the economic decision-making process being taken outside the realm of politics, thus leaving large sections of the population with no mechanism to influence the integration process so that it addresses their urgent needs and demands.

This electronic version has been made available under a Creative Commons (BY-NC-ND) open access license. This book provides a distinctive and empirically rich account of the European Union’s relationship with the Common Market of the South (Mercosur). It seeks to examine the motivations that determine the EU’s policy towards Mercosur; the most important relationship the EU has with another regional economic integration organization. In order to investigate these motivations (or lack thereof), this study examines the contribution of the main policy- and decision-makers, the European Commission and the Council of Ministers, as well as the different contributions of the two institutions. It analyses the development of EU policy towards Mercosur in relation to three key stages. Arana argues that the dominant explanations in the literature fail to adequately explain the EU’s policy, in particular, these accounts tend to infer the EU’s motives from its activity. Rather than the EU pursuing a strategy, as implied by most of the existing literature, the EU was largely responsive, which explains why the relationship is much less developed than the EU’s relations with other parts of the world.

A topical study of regional arrangements covering ASEAN, SAARC and APEC in Asia, NAFTA and MERCOSUR in the Americas, SADC, SACU and ECOWAS in Africa, and the European Union, EFTA and Eastern Europe. The book argues that foreign direct investment is complementary to trade and most regional arrangements can create trade and induce growth so long as they remain open and non-discriminatory. But they could also become stumbling blocks to globalization. The book demonstrates how US and EU trade policy will be crucial in shaping the world economy.

This book uses a sophisticated model to explain the apparently erratic pattern of conflict and cooperation in the Southern Common Market (MERCOSUR).

Latin America's experience with regional economic integration has been only slightly shorter than that of Europe. In fact, the first attempt at integration started as early as 1960, with the creation of LAFTA - the Latin American Free Trade Area (subsequently replaced by LAIA - the Latin American Integration Association). LAFTA, composed of 11 countries, sought, unsuccessfully, to create a free trade area in 12 years. In 1969, the Andean pact, which sought, also unsuccessfully, to create a sub-regional free trade area, was set up. Recently the Presidents of Argentina, Brazil, Paraguay and Uruguay signed the Treaty of Asuncion aimed at creating a common market as from 1st January, 1995. This common market, MERCOSUR, will be completed by 2006. In comparison with the earlier and unsuccessful attempts at integration, and despite challenges and problems, both internal and external, MERCOSUR is working, and trade between the member States is increasing. Furthermore, as with the case of the European Union (EU), serious attempts (notably between Argentina and Brazil) are being made to co-ordinate economic and monetary policies. The most important evidence of these moves is the introduction of hard currencies, the reduction in the size of the public sector and the privatization of State assets. These are clearly exciting times for Latin American integration. In this book, the first in a new series of books on International Economic Integration, the authors examine the experience of MERCOSUR in the Latin American integration progress. After an analysis of the history of the moves towards integration in South America, the case of each Member State and the Associate Country is examined and perspectives for the future are assessed.

The essays included in this book are the result ofseven years ofresearch spanning the 1990-1997 period. Most of them have been published in scientific magazines or as chapters of books. To the end of this edition, and in order to avoid repetitions, the original texts have been modified, particularly with regard to the titles and introductions ofthe chapters. Chapter two reproduces the article "Economic Integration and Intra-Industry Trade: The Case of the Argentine-Brazilian Free Trade Agreement", published in the Journal of Common Markets (vol XXIX, No 5, pp. 527-552, sept. 1991). Chapter three originates from an empirical study prepared for UNIDO, the United Nations Industrial Development Organization. The analytical framework and the preliminary conclusions of that work appeared in a working paper "The MERCOSUR Pattern of Intra-Industry Trade" (RP No 75, Stockholm: LAIS, 1997). Chapter four was published with the title "Plant-size Effects ofTrade: The Case of MERCOSUR Countries" as a chapter of the book Growth Trade and Integration in Latin America (W. Karlsson and A. Malaki (eds. ), Stockholm: LAIS, pp. 297-319, 1996). Chapter five in tum corresponds to the article entitled "Measuring the Effects of Economic Integration for the Southern Cone Countries: Industry Simulations of Trade Liberalization" as published in The Developing Economies (Vol. XXXIII, No 1, pp. 1-31, mars 1995). Finally, chapter six is the revised and updated version of the paper presented at the First European Congress ofLatinamericanists, which took place at Salamanca, Spain in June 1996.

An analysis of the viability of MERCOSUR as an effective engine of economic development. It considers MERCOSUR in all its real-world and theoretical contexts, from forces inherent in Latin American history to its role in a global trading regime dominated by the WTO, the IMF, the EU and NAFTA.