mercosur: an integration to process · march 16, 2017 ignacio bartesaghi, phd. contents of...
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MERCOSUR:AN INTEGRATION TO
PROCESS
March 16, 2017
Ignacio Bartesaghi, PhD
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Contents of presentation
• Mercosur background and legal framework.
• Central objectives of Mercosur.
• The present and challenges.
• Similitaries with ASEAN.
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• 1985 – Foz do Iguaçu Declaration
• 1986 – Argentina-Brazil Integration & Economic Cooperation Programme (“PICAB”).
Uruguay was already part of the Trade Expansion Protocol (Brazil) and CAUCE (Argentina)
Background
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Legal framework
• Asuncion Treaty (1991).
• Ouro Preto Protocol (1994).
• Ushuaia Protocol (1998).
• Olivos Protocol (2002).
• Constitutive Protocol of the Mercosur Parliament (2006).
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Asuncion Treaty
• The origin of Mercosur.
• Definition of the bloc’s objectives.
• Definition of Trade Liberalization Programme forthe transition period (Annexes).
• Definition of transitional bodies.
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Ouro Preto Protocol (1994)
• Conveys legal entity status to Mercosur.
• Defines institutional structure.
• Adoption of instruments from the typical tradepolicy of Customs unions.
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Ushuaia Protocol
• Relates to democratic commitment withinMERCOSUR.
• Consists of two protocols: Ushuaia I, and UshuaiaII.
• Includes participation of Chile and Bolivia.
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Olivos Protocol
• Substitutes the Brasilia Protocol.
• Defines the Mercosur Controversy SettlementSystem.
• Creates the Permanent Review Tribunal (“TPR”).
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Process
26/3/1991 Asuncion
Treaty
DEC 1994
Ouro Preto Protocol
1999 – Start of
negotiations with EU
Devaluation of Real.
2002 –
Olivos Protocol
Argentina –Uruguay
Crisis
2006 Constitutive Protocol of
ParlaSur
2010 –Negotiations are resumed with the EU
2012 –Paraguay is suspended Inclusion
of Venezuela
2016 –Venezuela
is suspended
FTZ CU
Agreements were subscribed with Chile, Bolivia, Peru, Colombia, Venezuela, Ecuador.
Agreements were subscribed with Cuba, India, Israel, SACU, Egypt and Palestine
Transition
Consolidation
FOCEM
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Objectives
Constitution of a Common Market:
Free circulation of goods, services and factors of
production.
Common external tariff and common commercial
policy.
Coordination of sectorial and macro-economic
policies.
Harmonized legislations.
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Decision making
• 3 bodies with decision-making powers:
Common Market Council.
Common Market Group.
Mercosur Trade Commission.
• Consensus with the presence of all members.
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Decisions within Mercosur
64%10%
11%
15%
Institucional y política
FOCEM
Económica y comercial
Agenda externa
0
5
10
15
20
25
FOCEM Institucional Política y social Económica y comercial
Agenda externa
2013 2014 2015
Mercosur politicization process in the last years. We
are now in a new context.
Source: personal compilation based on data from Mercosur Secretariat.
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• Trade Agenda: current trade agenda andrecently-approved decisions.
• Political Agenda: adhesion of new members.Implications and challenges.
• Production Agenda: actions carried forward inthe framework of productive integration.
Mercosur Agenda: general aspects (I)
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Mercosur Agenda: general aspects (II)
• Social Agenda: inclusion of social dimension.Institutional and regulatory advances in line withthe social agenda.
• Institutional Aspects: institutional advances inMercosur’s new agenda. Creation of permanentinstances.
• New actors: civil society, sub-national actors,political parties.
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Trade Agenda
• Measures aimed at defining and perfecting theCustoms union.
• 1994: approval of common external tariff (Dec.22/94).
• At present, there are exceptions to Customs unionand to the free trade area.
• 2015: intention to define a consolidationprogramme for the Customs union (Dec. 56/10).
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• Ouro Preto Protocol conveys legal entity status
for negotiating agreements with extra-zone
countries or groups of countries.
• Decision N° 32/00 – Reasserts commitment of
joint negotiations for trade agreements.
• There are exceptions: Uruguay – Mexico FTA,
Uruguay-U.S.A. TIFA.
External Agenda
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• Agreements within the LAIA framework.
• Agreements with extra-regional countries: India (2004), Israel(2007), South African Customs Union– SACU (2009), Egypt(2010), Palestine (2011).
• Framework agreements: South Africa, Marrakech, Pakistan,Jordan, Turkey, Syria, Gulf Cooperation Council (GCC), Korea(MoU), Russia (MoU), Singapore (MoU), Tunisia, Lebanon(MoU).
• Agreements under negotiations: European Union.
Agreements negotiated by Mercosur
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Chile and Bolivia
CAN and Peru
Cuba
India (Limited)
Israel
SACU (Limited)
Egypt
Palestine
No agreements in place with developed world powers like the U.S.A.,
the EU, or Asian powers.
Pacific Alliance.
Trade Agreements
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Integration models
Source: De María, N. Pereira, M. (2016). “Estrategias de inserción internacional del MERCOSUR y la ASEAN”.
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Potentials
• Diversification of trade opportunities:
– Exports of added-value food to the ASEAN.
– La ASEAN as supplier of low, medium, and high technologyindustrial goods.
– Opportunities in productive complementation for someindustrial sectors.
– Participation in global value chains.
• Services.
• Investments (infrastructure).
• Exchange of best practices.
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Mercosur new context
• New goverments in Argentina and Brazil.
• Implications of the suspension of Venezuela fromMercosur.
• The incorporation of Bolivia to Mercosur.
• The external agenda: negotiations with theEuropean Unión.
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Conclusions
• Original objectives were not attained.
• There are strengths in the political and socialareas, but weaknesses in the economic andtrade areas.
• New context and some uncertainties aboutthe future.
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MERCOSUR:AN INTEGRATION TO
PROCESS
March 16, 2017
Ignacio Bartesaghi, PhD