Mercosur: Evolution and Implications for U.S. Trade Policy

摘要

Mercosur is the Common Market of the South established by Brazil, Argentina, Uruguay, and Paraguay in 1991 to improve political and economic cooperation in the region following a lengthy period of military rule and mutual distrust. On July 2, 2006, Venezuela acceded to the pact as its first new full member, making Mercosur the undisputed economic counterweight to U.S. trade policy in the region, but raising questions about how it may shift regional political and trade dynamics. Collectively, the Mercosur countries have a diversified trade relationship with the world. The United States is its largest trading partner, the European Union (EU) a close second, with each claiming about 25% of total Mercosur trade. By contrast, the four Mercosur countries together account for only 2% of total U.S. trade. Including U.S. imports of Venezuelan oil, the 'Mercosur 5' constitute 3.5% of total U.S. trade. The Mercosur pact calls for an incremental path to a common market, but after 15 years, only a limited customs union has been achieved. From the outset, Mercosur struggled to reconcile a basic inconsistency in its goals for partial economic union: how to achieve economic integration, while also ensuring that the benefits would be balanced among members and that each country would retain some control over its trade, production, and consumption structure. This delicate balance faced serious structural and policy asymmetries that became clear when Brazil and Argentina experienced financial crises and deep recessions. These economic setbacks disrupted trade flows among members, causing friction, the adoption of new bilateral safeguards, and a retreat from the commitment to deeper integration.