Southern Common Market (MERCOSUR)
Founded in March 1991 by the Treaty of Asunción between Argentina, Brazil, Paraguay and Uruguay, MERCOSUR committed the signatories to the progressive reduction of tariffs culminating in the formation of a common market on 1 Jan. 1995. This duly came into effect as a free trade zone affecting 90% of commodities. A common external tariff averaging 14% applies to 80% of trade with countries outside MERCOSUR. Details were agreed at foreign minister level by the Protocol of Ouro Preto signed on 17 Dec. 1994.
In 1996 Chile negotiated a free trade agreement with MERCOSUR which came into effect on 1 Oct. Subsequently Bolivia, Chile, Colombia, Ecuador, Guyana, Peru and Suriname have all been granted associate member status. Bolivia began the accession process to full membership in 2012. Mexico and New Zealand have observer status. Venezuela, which had associate membership between 2004 and 2006, became the fifth member of MERCOSUR in July 2006, although it was not going to have full voting rights until all the other full members had ratified its entry into the organization. Paraguay was the only country still to approve Venezuela’s full membership, but it was suspended from MERCOSUR in June 2012 following the impeachment of its president, Fernando Lugo. With Paraguay suspended, Venezuela was then formally admitted in July 2012. Paraguay was readmitted in Aug. 2013 after the swearing-in ceremony of its new democratically-elected president, Horacio Cartes. Venezuela was suspended in Dec. 2016 for failing to meet membership requirements.
Organization. The member states’ foreign ministers form a Council responsible for leading the integration process, the chairmanship of which rotates every six months. The permanent executive body is the Common Market Group of member states, which takes decisions by consensus. There is a Trade Commission and Joint Parliamentary Commission, an arbitration tribunal whose decisions are binding on member countries, and a secretariat in Montevideo.
Further to the treaty signed by 12 South American countries in May 2008, it is anticipated that MERCOSUR will gradually be integrated into the Union of South American Nations.
Headquarters: Dr Luis Piera 1992, Piso 1, 11200 Montevideo, Uruguay.
Website (Spanish and Portuguese only): http://www.mercosur.int
President pro tempore: Mauricio Macri (Argentina).