Big Day Out
World Trade Agreements Analysis
1. Mercusor Trading block
Background
The Mercusor trading block is South America’s biggest trade agreement which brings together some of the world’s biggest economies in a customs union. For decades both Argentina and Brazil struggled for supremacy on the continent of South America, with numerous attempts to forging greater levels of coordination resulting in a trade agreement which brought about one of the world’s largest customs union. Signed in 1991 by Argentina, Brazil, Paraguay and Uruguay the Mercusor trade agreement was originally designed to foster unity among the southern cone nations before bringing about the ultimate aim of southern American cooperation. This union created an integrated regional market whose members were committed to "strengthening the economic integration process by making the most efficient use of available resources, preserving the environment, improving physical links, coordinating macroeconomic policies and complementing the different sectors of the economy, based on the principles of gradualism, flexibility and balance."
The implications for each nation upon joining the customs union are as follows:
• Free movement of goods, services, and factors of production, by means of the elimination of customs duties and non-tariff restrictions.
• The establishment of a Common External Tariff (CET) and the undertaking of a common trade policy, as well as coordination of positions in economic, trade, regional and international forums.
• The coordination of macroeconomic policies among member countries in the areas of: foreign trade, agriculture, industry, fiscal and monetary issues, foreign exchange and capital, services, customs, transport and communications.
• The commitment to harmonize legislation on the relevant matters in order to strengthen the integration
1. Mercusor Trading block
Background
The Mercusor trading block is South America’s biggest trade agreement which brings together some of the world’s biggest economies in a customs union. For decades both Argentina and Brazil struggled for supremacy on the continent of South America, with numerous attempts to forging greater levels of coordination resulting in a trade agreement which brought about one of the world’s largest customs union. Signed in 1991 by Argentina, Brazil, Paraguay and Uruguay the Mercusor trade agreement was originally designed to foster unity among the southern cone nations before bringing about the ultimate aim of southern American cooperation. This union created an integrated regional market whose members were committed to "strengthening the economic integration process by making the most efficient use of available resources, preserving the environment, improving physical links, coordinating macroeconomic policies and complementing the different sectors of the economy, based on the principles of gradualism, flexibility and balance."
The implications for each nation upon joining the customs union are as follows:
• Free movement of goods, services, and factors of production, by means of the elimination of customs duties and non-tariff restrictions.
• The establishment of a Common External Tariff (CET) and the undertaking of a common trade policy, as well as coordination of positions in economic, trade, regional and international forums.
• The coordination of macroeconomic policies among member countries in the areas of: foreign trade, agriculture, industry, fiscal and monetary issues, foreign exchange and capital, services, customs, transport and communications.
• The commitment to harmonize legislation on the relevant matters in order to strengthen the integration