Mercosur: At the Mercy of Other Markets

Sep 13, 2016 | 09:15 GMT
Economic Unions Series: Mercosur (Display)

The Common Market of the South, better known by its Spanish acronym Mercosur, emerged in the early 1990s as a small bloc with a big goal: to ease the movement of people and goods throughout South America. The continent's leaders hoped that by joining South America's biggest economies, Brazil and Argentina, they could someday unite the entire Southern Cone. Much like the European Union's France and Germany, Brazil and Argentina have led their bloc since its inception, albeit unequally. (Because the Brazilian economy is notably larger than its Argentine counterpart, Brasilia's clout within Mercosur is far greater than Buenos Aires'.) By comparison, the economies of Mercosur's three remaining members -- Venezuela, Uruguay and Paraguay -- are too small or too specialized to claim much influence over the bloc's decision-making. Given Brazil and Argentina's advanced economic development relative to their peers, the distribution of power within the bloc is unlikely to change...

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