UC Irvine

Mercosur (Mercado Común del Sur, “Common Market of the South”) is the fourth-largest trading bloc (following the European Union [EU], North American Free Trade Agreement [NAFTA], and Association of Southeast Asian Nations [ASEAN]), and home to a BRIC (Brazil, Russia, India, and China) member. As it enters its twenty-second year, we consider what best explains Mercosur’s trajectory thus far, from promising start to recent stagnation. The common market project requires Argentina, Brazil, Paraguay, Uruguay, and recent member Venezuela to integrate their markets and policies more deeply than would be required of a simple free trade area (FTA). Yet Mercosur lacks the binding supranational institutions an economic union would require. The four founding members sought regional integration that, according to the founding treaty, would yield greater economic development and competitiveness. Moreover, the newly democratized founding members also sought integration to consolidate their emerging open-economy democracies (Solingen 1998; Kaltenthaler and Mora 2002; Oelsner 2003).