Why mercosur was formed

These participate in activities and meetings of the Bloc and have trade preferences with the States Parties. MERCOSUR has also signed commercial, political or cooperation agreements with a diverse number of nations and organizations on all five continents. Aligned with these, different agreements have been added in terms of migratory, labour, cultural, and social matters -just to mention a few, which are of utmost importance for its inhabitants.

These agreements meant the incorporation of the Citizen, Social and Productive Integration dimensions. Its greatest asset, nevertheless, is its people. Thanks to a population of over million people, it has an invaluable heritage of cultural, ethnic, linguistic and religious diversity, which coexists harmoniously making MERCOSUR a region of peace and development. Its population exceeds ,, inhabitants with a formidable diversity across peoples and cultures.

It has one of the most important reserves of freshwater on the planet: the Guarani Aquifer. The union even considered the creation of a common currency, the gaucho , though that idea was later discarded.

Throughout the following decade, a number of trade disputes between member countries regarding tariff barriers and development projects divided the bloc. Members decided to temporarily suspend Paraguay in after its senate impeached then-President Fernando Lugo after a string of incidents of civil unrest turned fatal. The country was permitted to rejoin after presidential elections in April Its membership is expected in the first half of Membership in Mercosur is dependent on meeting and maintaining a number of political and economic criteria.

On the economic front, Mercosur members agree to the free movement of goods and services between member countries. Any change to Mercosur economic policy requires the consensus of the other members, but countries can ask that certain products be exempt to protect local industries.

In recent years, Argentina and Brazil have taken advantage of this option. The group also subscribes to the CET , which dictates the tariff members apply to trade with non-member or associate countries. The CET is subject to change and is set by consensus, but has been a source of contention. Argentina and Brazil often favor higher duties to protect local industry, while Paraguay and Uruguay favor lower tariffs.

During the global financial crisis and subsequent economic troubles in the Eurozone, Argentina and Brazil requested allowing a tariff increase of up to 35 percent on products. The CET averages between 10 and 12 percent, but often fluctuates. Mercosur members adhere to a number of agreements guiding currency exchange, investment, tax issues, and educational exchanges. The goal is to standardize regulations between member countries in order to ease commerce.

Negotiations for an FTA with the European Union began in , were suspended in , and continue to be of ongoing discussion. In addition to these economic requirements, the bloc also requires that members maintain democratic governance. In addition to the permanent members, Chile, Colombia, Ecuador, Guyana, Peru, and Suriname serve as associate members. Two others, Parlasur and the Structural Convergence Fund, were developed later.

Tensions between Venezuela and other Mercosur members have been mounting for months, constricting the trading bloc as Latin America undergoes significant shifts—the ebb of the so-called "pink tide" — to more conservative, market-friendly leadership. Disagreements between Venezuela and other member countries came to a head as it was time for Venezuela to assume the trading bloc's presidency in August. The Mercosur presidency rotates alphabetically every six months and, on August 1, Uruguay was meant to hand the leadership role over to Venezuela, but the move faced strong opposition from the presidents of Argentina, Brazil, and Paraguay.

These conflicts caused Uruguay to postpone a subsequent presidential summit meant to be held in Montevideo in July Instead, a summit of foreign ministers was held, with the conversation largely focusing on Venezuela's political situation and whether the country should be allowed to lead the trading bloc, though no consensus was reached.