MERCOSUR: How It Stands Today

Image Courtesy of Costa Oriental

By Jack Acrich

The different nation-states present in the Latin American region have always tried to promote integration and cooperation to some extent. Taking into consideration that most of the countries in the area share the same language and have a common history, projects to bring together these nations can be very reasonable. However, even if many regional organizations have been created, many of them do not really fulfill their true objective or are abandoned by the same states that created it. 

An example can be the case of La Unión de Naciones Sudamericanas (UNASUR) which was created to build an environment of integration in cultural, social, economic and political matters. This organization was established around 2008 by states like Argentina, Bolivia, Brazil, Chile, Colombia,Ecuador, Guyana, Paraguay, Perú, Surinam, Uruguay and Venezuela. By 2020, great part of the members are no longer in the organization and only Venezuela, Guyana and Surinam remain. This shows that even if the idea for cooperation is present, in the end many states end up following their own particular objectives and it is possible to consider that they are not really committed to one another. This can be related to the idea that when a new president is elected or the government changes in a Latin American state, the foreign policy tends to shift dramatically and, in many cases, the new administration tries to adjust and undo what the previous one did. 

The regional integration organization Mercado Común del Sur trade bloc or MERCOSUR was created in 1991 with the Treaty of Asunción with the intention of promoting the free movement of goods, productive factors and services among the member states eliminating customs duties. Additionally, it had the intention of creating a common external tariff and coordinating foreign trade, industrial fiscal, monetary, industrial and agricultural policies in some way where member states would have to harmonize their legislation related to these economic areas. It was originally integrated by Argentina, Brazil, Paraguay and Uruguay. Bolivia is in the process of becoming a member since 2015 and it is not very clear if it will join in the end. Additionally, around 2006, Venezuela was added to the Treaty of Asuncion and became a member, but in 2016 the state was suspended form the organization because the member states believed that it was not complying with the requirements of full membership and were concerned with the violation of human rights present in the state. It is said that the original inclusion of Venezuela in MERCOSUR was more for political reasons where the governments of some member states hadmore socialist inclinations as Venezuela. When regimes changed in the region and Venezuela’s government kept its socialist vision, the state was suspended showing that political interests guide many of the policies in the continent and are very volatile. 

From a geographic point of view, the region that includes the Río de la Plata area (where there are lands that are appropriate for agriculture and there is a lack of mountains ranges) facilitates the integration and economic communication between the different South American states present there. In this way, the sates of Paraguay, Argentina, Brazil and Uruguay share this region and it is likely that the idea to integrate and cooperate between them appeared because of the conditions present in their particular states. In contrast, Venezuela is isolated from this region due to the presence of the Amazon rainforest that complicates communication, and even if this state borders Brazil there are very few roads that actually connect both countries. The idea to incorporate more states into MERCOSUR can be really positive for the continent, but for the states that do not share the Rio de la Plata region it can be more complicated.

Even if MERCOSUR has helped increase trade between the member states since its creation, and has an enormous potential, the internal politics of the different countries can affect the dynamics and stability of the organization. In this line, the changes present in Argentina where the government has changed form a socialist inclination to a more capitalist vision and back again, can have a negative impact in the long term for the plans MERCOSUR can have for the future. In other states like Brazil internal changes in the government have also influenced its foreign policy. In the end particular interests can prevail over the integration project where the bloc has not really achieved the level of cooperation that was expected. Nevertheless, MERCOSUR has shown an intention to expand to other markets and have seemed to reach a trade deal with the European Union in 2019. Taking into account that the for MERCOSUR the EU is the organization’s trade and investment partner, a trade agreement could have enormous benefits for the South American bloc. This trade deal plans to increase bilateral trade and investment as well as promote lower tariff and non-tariff trade barriers. Another important aspect of the deal is that it will try to add sustainable development projects. Additionally, it would try to create more stable rules for investment and trade with stronger rules in areas like food safety standards and intellectual property.

The original intentions to create MERCOSUR can be seen as a real opportunity to create a real integration initiative in the continent where many of the different member states speak the same language and have a geographical landscape that facilitates communication to a certain point. Still, in order to really achieve the goals of the organization the states must really commit to the original vision of the organization. This can have some problems form the political point of view in which internal politics can have an impact of the way the organization works. The trade deal with the EU shows an ambitious plan that can help increase free trade among different regions in the world.MERCOSUR can learn a lot form the European project of integration that has brought a lot of economic benefits for the continent.

Jack Acrich is a Venezuelan third-year student at the University of Navarra. Besides his deep interest for Latin America, he is passionate about geopolitics and how the dynamics in this field shape the world of International Relations.