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Mercosur: Paving the Way for Latin American Integration

source telesur

The Common Market of the South (Mercosur), a sub-regional bloc whose main purpose is to promote free trade and the fluid movement of goods, people and currency, was created on the basis of a historic conflict in the region.

The conflict began during the colonial times with both the Spanish and Portuguese empires wanting to control the Rio de la Plata Basin, a vast maritime area covering parts of modern-day Argentina, Brazil, Bolivia, Paraguay and Uruguay, which is also one of the largest river basins on Earth.

Even after the European powers were expelled from the continent, the two super powers of the region, Argentina and Brazil, were in constant hostility over control of the region and its resources. The three smaller nations of the region, Uruguay, Paraguay and Bolivia, were also heavily interested in the area, particularly the latter two, who became the only two landlocked South American countries, or as Brazilian writer Paulo R. Schilling referred to them — “geopolitical prisoners.”

However, since the 1960s, the governments of Argentina and Brazil began reconciling their differences and started to work together in order to take advantage of the strategic territory, especially given the demands of the new global order. In 1980, the two nations grew closer with the signature of the Tripartite Agreement, a deal that developed closer relations between the two countries’ civil societies, but did not amount to political or economic integration.

During this decade, perhaps due to the increased collaboration between the military regimes of the countries, the regional powers started conversations for greater regional cooperation, which were eventually formalized in 1985 through the Iguazu Declaration.

A year later in Buenos Aires, Presidents Jose Sarney of Brazil and Raul Alfonsin of Argentina formally signed the Integration and Economics Cooperation Program (PICE), which aimed to create a common economic area, a benchmark in the push towards regional integration in Latin America.

The decisive step in the creation of a common market took place nearly half a decade later on March 26, 1991, with Argentina, Brazil, Paraguay and Uruguay signing the Treaty of Asuncion, where these nations agreed to form a customs union named the Southern Common Market, or Mercosur.

The treaty let to member countries committing to strengthening the economic integration process by making the most efficient use of available resources, preserving the environment, improving physical links, coordinating macroeconomic policies and complementing the different sectors of the economy. In the treaty’s final resolution, the members also agreed to base the arrangement on the principles of gradualism, flexibility and balance.

The bloc consolidated in 1994 through the Protocol of Ouro Preto, which amended the Treaty of Asuncion, transforming Mercosur from a Free Trade Area into a Customs Union.

While visions for regional integration dated back to the writings of South American liberator Simon Bolivar, the process was hindered for almost two centuries due to the parochial differences among the countries in the region. U.S. imperialism also contributed to these divisions, often pitting countries against each other through U.S.-dominated institutions like the Organization of American States (OAS), while also pushing for treaties based U.S. hegemonic interests, such as the now-defunct Free Trade Area of the Americas (FTAA).

Mercosur, which was born during the height of the region’s neoliberal era, also became an economic instrument adapted to the world economic order in the aftermath of the fall of the Soviet Union. This period was characterized by economic pacts like the North American Free Trade Agreement (NAFTA) in 1994, and the 1993 European Union, both of which were crafted in the triumphalist spirit of capitalist globalization.

Despite the dominance of neoliberal economics throughout the world, the late 1990’s in Latin American politics ushered in a new regional trend characterized by the election of left-wing and center-left governments and a gradual rejection of the neoliberal doctrine. In the new millennium, this trend grew and those governments radicalized, putting Bolivar's dream of a united Latin America on the region’s political agenda again. This trend, which has been called “Pink Tide” by academics and international media, also began to influence the customs union.

In 2004, Venezuelan President Hugo Chavez asked to join the bloc, which by this point had left-wing presidents heading three of the four Mercosur members. Two years later, Argentina, Brazil, and Uruguay approved Venezuela’s membership. However, the government of Paraguay, led by conservative President Nicanor Duarte, refused to grant full membership to the country, citing spurious concerns about “lack of democracy” in Venezuela.

Ultimately, it was a “lack of democracy” in Paraguay that would permit the full inclusion of Venezuela as a member after the parliamentary coup against Paraguayan left-wing President Fernando Lugo, who was “impeached” and removed from office in June 2012 after seventeen people were killed in a clash between landless farmers and policemen trying to evict them in the city of Curuguaty. The bloc viewed this as an undemocratic pretext to expel Lugo from the presidency.

Paraguay was suspended from the bloc until their next presidential election in 2013. The action allowed for the entrance of a key member to Mercosur, oil-rich Venezuela, which made significant economic contributions to the bloc. This development also highlighted the union’s political shift, including a commitment to uphold democracy in a region that was plagued by dictatorships in previous decades.

With left-leaning leaders in Venezuela, Brazil, Argentina and Uruguay in the bloc, the leaders began to push for a Mercosur that prioritized social concerns.

According to official figures, the combined population of all five member states is estimated at 275.5 million, with a collective GDP of US$2.9 trillion, making Mercosur the world's fourth-largest trading bloc after the European Union (EU), North American Free Trade Agreement (NAFTA), and the Association of South East Asian Nations (ASEAN).

The leaders of Mercosur and the Andean Community of Nations (CAN), a smaller trade bloc that includes Bolivia, Colombia, Ecuador and Peru, signed an agreement in 2008 to form a third organization, UNASUR, which is meant to encompass trade, security, and political issues throughout the whole region, highlighting the commitment to develop Latin America unity and the realization of Bolivar – and Chavez’s – dream of a united continent.

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