Brazil is the core state of South America and sustains an alliance called Mercosur. Mercosur Is a trading zone between Brazil, Argentina, Uruguay and Paraguay, founded in 1991 by the Treaty of Asuncion.
Its purpose is to promote free trade and the fluid movement of goods, peoples, and currency.
Mercosur tariff policies regulate imports and exports and the bloc can arbitrate in trade disputes among its members.
In the longer term, Mercosur aims to create a continent-wide free-trade area, and the creation of a Mercosur development bank has been mooted.
Some South Americans see Mercosur as giving the capability to combine resources to balance the activities of other global economic powers, perhaps especially the United States and the European Union.
There are more than 220 million consumers in this region (South America) and the combined Gross Domestic Product of the member nations is more than one trillion dollars a year.
Mercosur was the focus of much European attention during the 1990s, both politically and economically, attracting large amounts of investment to the region. Mercosur has drawn Brazil closer to the European Union, functioning well as an instrument of Brazil's external ambitions, though also exposing it to the risk of free trade with Europe. For both Mercosur and EU-Mercosur relations to remain useful to current Brazilian ambitions, they must remain short of achieving their final goals and linger in a prolonged state of negotiation. Some EU states also prefer this solution. Faced with the challenge of reviving Mercosur, the president of Brazil might have to make difficult choices with regard to Brazil's own interests. Through an EU-Mercosur agreement Brazil could resuscitate the Argentinean and Uruguayan economies, though this might be at a cost for Brazil. Will Brazil be willing to pay this price in order to preserve Mercosur?
Its purpose is to promote free trade and the fluid movement of goods, peoples, and currency.
Mercosur tariff policies regulate imports and exports and the bloc can arbitrate in trade disputes among its members.
In the longer term, Mercosur aims to create a continent-wide free-trade area, and the creation of a Mercosur development bank has been mooted.
Some South Americans see Mercosur as giving the capability to combine resources to balance the activities of other global economic powers, perhaps especially the United States and the European Union.
There are more than 220 million consumers in this region (South America) and the combined Gross Domestic Product of the member nations is more than one trillion dollars a year.
Mercosur was the focus of much European attention during the 1990s, both politically and economically, attracting large amounts of investment to the region. Mercosur has drawn Brazil closer to the European Union, functioning well as an instrument of Brazil's external ambitions, though also exposing it to the risk of free trade with Europe. For both Mercosur and EU-Mercosur relations to remain useful to current Brazilian ambitions, they must remain short of achieving their final goals and linger in a prolonged state of negotiation. Some EU states also prefer this solution. Faced with the challenge of reviving Mercosur, the president of Brazil might have to make difficult choices with regard to Brazil's own interests. Through an EU-Mercosur agreement Brazil could resuscitate the Argentinean and Uruguayan economies, though this might be at a cost for Brazil. Will Brazil be willing to pay this price in order to preserve Mercosur?
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