1. Presented By: Tarundeep Singh Vinay Chawla
MERCOSUR
Presented By:
Tarundeep Singh
Vinay Chawla

2. ORIGIN
Treaty signed on March 26th 1991 by Brazil, Argentina, Paraguay and Uruguay
Treaty of Asuncion Supplemented Brazil and Argentinas already established Treaty of Buenos Aires.
Venezuela signed agreement June (pending)

3. HISTORY
1991: Treaty of Asunción goes into force in 1991, effectively mandating the creation of a common southern market (MERCOSUR) by December 31,
Original signatories are Brazil, Argentina, Paraguay, and Uruguay
1994: Creation of Mercosur

4. HISTORY (CONTD…..)
1995: Creation of customs union. MERCOSUR and the European Union sign an agreement of trade association and cooperation in various areas
1999: Free trade agreement with two trading block EU and NAFTA
2004: Preferential trade agreement with India

5. INTRODUCTION Mercado Comun del Sur (Common Market of the South)
Custom Union: Brazil, Argentina, Paraguay, Uruguay, and Venezuela
Biggest Trade Block in South America and 4th Worldwide
Its purpose is to promote free trade and the fluid movement of goods, people, and currency

7. ASSOCIATES AND OBSERVERS
Colombia
Bolivia
Chile
Ecuador
Peru
Venezuela
Mexico ( Observer)
Reason- Mexico is a member of NAFTA.

8. OBJECTIVES Free Transit amongst members Elimination of Custom Rights
Common External Tariffs
World Economic Power

9. MERCOSUR POPULATION
Brazil makes up 80% of MERCOSUR population (191,241,714)
Argentina (40,482,000) Venezuela (26,414,826) Paraguay (6,821,306) Uruguay (3,477,780)
Over 268 billion population combined

10. REASONS FOR DIFFICULTY IN EXISTENCE ON INTEGRATION
Economic Instability
2002- Argentina’s economic issues, peru value reduction, affecting Brazil and Uruguay, price of commodities in Argentina fall.
Political Instability
President of Brazil trying to get global recognition to become the leader of developing countries created resentment to Argentina.

11. VENEZUELA ISSUE Brazil Paraguay 2 Year delayed acceptance
Itaipu treaty
Brazil will benefit from Venezuela’s resources
Paraguay
Acceptance yet to be ratified
Pressure on Fernando Lugo
Political stress in Paraguay

12. INDIA & MERCOSUR
A Framework Agreement had been signed between India and MERCOSUR on 17th June 2003
India – MERCOSUR PTA came into effect from 1st June, 2009
Products covered in Indian offer list are meat and meat products, organic & inorganic chemicals
Product covered in the offer list of MERCOSUR are food preparations, pharmaceuticals, essential oils
 It was estimated that trade volume should reach 17 billion USD in 2012 and 30 billion USD by 2030

13. ADMINISTRATIVE/INSTITUTIONAL STRUCTURE OF MERCOSUR
Common Market Council (CMC):
The Council is the highest-level agency of MERCOSUR with authority to conduct its policy, and responsibility for compliance with the objects and time frames set forth in the Asuncion
Common Market Group ( CMG):
To cause compliance and to take resolutions required for implementation of the decisions made by the Council.
It can initiate practical measures for trade opening
Coordination of macroeconomic policies
Negotiation of agreements with non-member states and international agencies
Participating when need be in resolution of controversies under MERCOSUR

14. ADMINISTRATIVE/INSTITUTIONAL STRUCTURE OF MERCOSUR(CONTD..)
Commercial Commission of MERCOSUR (CCM):
Assists the Common Market Group in the enforcement of trade policies
Joint Parliamentary Commission (CPS):
The Committee will have both an advisory and decision- making nature, with powers to submit proposals as well
Social-Economic Consultative Forum (FCES):
Brings together various associations and interest groups from member countries

15. MERCOSUR AFFECT ON OTHER REGIONAL GROUPS
Mercosur's charter does not allow its member nations to have FTAs with non-member nations.
Mercosur members are not permitted to be part of the Andean Community of Nations (CAN)
Mercosur played a key role in the failure of the Free Trade Agreement of the Americas (FTAA).

18. Source: http://www10.iadb.org
Graph Showing sector wise Trade (in Billion Euros) with EU for the year 2012
Source:

19. ACHIEVEMENTS
Mercosur has helped its members to lock in domestic reforms.
Internationally, the regional association has given its members a degree of visibility that they would not have gained otherwise.
Increased visibility is politically and strategically relevant in and of itself, but it also contributed to massive foreign investment in the 1990s, a decade of vast capital availability.

20. ACHIEVEMENTS CONTD..
Economically, Mercosur also attained initially good results.
Intra-regional trade tripled in the seven years following the signature of the Treaty of Asuncion.
The increase resulted from trade creation rather than diversion, since extra-regional trade also augmented.

21. FALIURES
Representation is weak or non-existent: the Mercosur parliamentary body represents national parliaments not citizens and it lacks effective competences.
The Mercosur flag and its associated symbols are not widely used, remaining limited to the diplomatic arena.
Unlike the EU, which put the so-called four freedoms at the heart of economic integration, ‘MERCOSUR has not gone beyond goods’ trade liberalisation.

22. FALIURES CONTD..
The chosen integration technology has also proved to be either insufficient or inefficient. Since all decision- making, dispute-settlement and implementation capacities are in the hands of the member countries, Mercosur operates through diplomatic rather than juridical procedures.
As regards the international dimension, Mercosur has failed to enlarge its membership.
Mercosur’s institutional deficits are probably the most visible but not always the best understood.

23. FUTURE IMPLICATIONS
To raise the maximum common external tariff on imports to 35 percent
Washington views the bloc as an obstacle to the expansion of their trade in Latin America
In the long run, the end of Mercosur will be a good thing if it drives its members to open trade with the rest of the world.
But in the short run, with so many industries heavily invested in the rules of the Mercosur game, a breakup is certain to be disruptive