Merchandise trade

Date: 2015-10-07; view: 402.

Consolidation of Argentina, Brazil, Paraguay and Uruguay signed the agreement providing creation of the total market — MERCOSUR (Mercado Comun del Sur — MERCOSUR). Purposes, tasks, prospects MERCOSUR. Commodity structure of export and import to MERCOSUR

Mercosur or Mercosul (Spanish: Mercado Común del Sur, Portuguese: Mercado Comum do Sul, Guarani: Ñemby Ñemuha, English: Southern Common Market) is an economic and political agreement among Argentina, Brazil, Paraguay, Uruguay, and Venezuela; with Bolivia becoming an accessing member on 7 December 2012 to be ratified by the Member State's legislatures.

It was established in 1991 by the Treaty of Asunción, which was later amended and updated by the 1994 Treaty of Ouro Preto.

Its purpose is to promote free trade and the fluid movement of goods, people, and currency. The official languages are Guaraní, Portuguese and Spanish. It has been updated, amended, and changed many times since. It is now a full customs union. Mercosur and the Andean Community of Nations are customs unions that are components of a continuing process of South American integration connected to the Union of South American Nations.

Mercosur originated in 1985, when Presidents Raúl Alfonsín of Argentina and José Sarney of Brazil signed the Argentina-Brazil Integration and Economics Cooperation Program or PICE (Portuguese: Programa de Integração e Cooperação Econômica Argentina-Brasil, Spanish: Programa de Integración y Cooperación Económica Argentina-Brasil). The program also proposed the Gaucho as a currency for regional trade.

The founding of the Mercosur Parliament was agreed at the December 2004 presidential summit. It should have 18 representatives from each country by 2010, regardless of population.

Full membership for Venezuela became effective on 31 July 2012, after the suspension of Paraguay on 22 June 2012 for the violation of the Democratic Clause of Mercosur (see Impeachment of Fernando Lugo). Beforehand, Venezuela had signed a membership agreement on 17 June 2006 but its accession was blocked by the Senate of Paraguay.

Bolivia, Chile, Colombia, Ecuador, and Peru currently have associate member status.

The Southern Common Market promotes:

- The free transit of produced goods, services and factors among the member states. Among other things, this includes the elimination of customs rights and lifting of nontariff restrictions on the transit of goods or any other measures with similar effects;

- Fixing of a common external tariff (CET) and adopting of a common trade policy with regard to nonmember states or groups of states, and the coordination of positions in regional and international commercial and economic meetings;

- Coordination of macroeconomic and sectorial policies of member states relating to foreign trade, agriculture, industry, taxes, monetary system, exchange and capital, services, customs, transport and communications, and any others they may agree on, in order to ensure free competition between member states;

- The commitment by the member states to make the necessary adjustments to their laws in pertinent areas to allow for the strengthening of the integration process. The Asunción Treaty is based on the doctrine of the reciprocal rights and obligations of the member states. Mercosur initially targeted free-trade zones, then customs unification, and finally a common market. The common market will allow (in addition to customs unification) the free movement of manpower and capital across the member nations, and depends the grating of equal rights and duties to all member countries. Because member states will implement the trade liberalization at different speeds, during the transition period the rights and obligations of each party will initially be equivalent but not necessarily equal. In addition to the reciprocity doctrine, the Asunción Treaty also contains provisions for the most-favored nation concept. This concept is that after the common market is formed, member nations are to automatically extend to the other members any advantage, favor, entitlement, immunity or privilege granted to a product originating from or intended for countries that are not party to the Latin American Integration Association (ALADI).

Intra-Mercosur merchandise trade (excluding Venezuela) grew from US$10 billion at the inception of the trade bloc in 1991, to US$88 billion in 2010; Brazil and Argentina each accounted for 43% of this total. The trade balance within the bloc has historically been tilted toward Brazil, which recorded an intra-Mercosur balance of over US$5 billion in 2010. Trade within Mercosur amounted to only 16% of the four countries' total merchandise trade in 2010, however; trade with the European Union (20%), China (14%), and the United States (11%) was of comparable importance. Exports from the bloc are highly diversified, and include a variety of agricultural, industrial, and energy goods. Merchandise trade with the rest of the world in 2010 resulted in a surplus for Mercosur of nearly US$7 billion; trade in services, however, was in deficit by over US$28 billion. The EU and China maintained a nearly balanced merchandise trade with Mercosur in 2010, while the United States reaped a surplus of over US$14 billion; Mercosur, in turn, earned significant surpluses (over US$4 billion each in 2010) in its trade with Chile and Venezuela. The latter became a full member in 2012.

Country	Population in 2011 (In thousands)	GDP (nominal) in 2011 (USD millions)	GDP (nominal) per capita	GDP (PPP) in 2011(USD millions)	GDP (PPP) per capita	Merchandise exports ($ billions), 2011	Merchandise imports ($ billions), 2011	Exports to Mercosur (% of each, 2010)	Imports from Mercosur (% of each, 2010)
Argentina	40,900	447,644	10,945	716,419	17,516	84.3	73.9	25.2	33.6
Brazil	194,933	2,492,908	12,789	2,294,203	11,769	250.8	219.6	11.1	8.9
Paraguay	6,530	21,236	3,252	35,346	5,413	9.8	12.1	29.0	42.0
Uruguay	3,369	46,872	13,914	50,908	15,113	8.0	10.7	33.8	48.8
Venezuela	29,767	315,841	10,610	374,111	12,568	92.6	46.4	2.4	18.0
Total	275,499	3,324,501	12,067	3,471,027	12,599	445.5	362.7	13.2	16.8