Venezuela Was Suspended From The Common Market Agreement Of

Dez 20, 2020 von

After a period of initial success – with a fivefold increase in trade between blocs, from $4 billion in 1990 to $20 billion in 1997 – the bloc faltered amid crises caused by the devaluation of the Brazilian real in 1999 and Argentina`s economic meltdown in 2001. Over the next decade, a number of trade disputes between Member States over customs barriers and development projects divided the bloc. While trade between members increased to $41 billion in 2010, „they represent a much smaller share of each member`s total exports than at its peak in 1997,“ the Economist said in 2012. Member States can assess goods from these areas with the common external tariff used for Mercosur or, for some special products, the national tariff applicable in each Member State. In this way, products from free trade zones can benefit from the more favourable tax treatment provided by the southern common market, imported into the normal customs areas of each Member State, or, in the case of certain special products, the normal customs treatment that prevails in each country. Products outside Mercosur are heavily taxed, so local businesses do not feel the need to compete with large international companies. Mercosur`s origins are linked to discussions about the creation of a regional economic market for Latin America, which date back to the treaty that founded the Latin American Free Trade Association in 1960, which was replaced by the Latin American Integration Association in the 1980s. At that time, Argentina and Brazil made progress in this area and signed the Iguau Declaration (1985), which established a bilateral commission, followed by a series of trade agreements the following year. The Treaty on Integration, Cooperation and Development, signed in 1988 between the two countries, aims to create a common market to which other Latin American countries could join. Paraguay and Uruguay joined the process and the four countries signed the Treaty of Asuncion (1991), which founded the Common Market in 1991, a trade alliance aimed at stimulating the regional economy, displacing goods, people, workers and capital.

Initially, a free trade area was established, in which signatory countries would not impose or restrict imports from other countries. From 1 January 1995, this sector became a customs union in which all signatories were able to apply the same quotas for imports from other countries (external tariffs). The following year, Bolivia and Chile were granted membership status. Other Latin American nations have expressed interest in joining the group. In addition, the Committee on Trade should decide on the issues raised by Member States regarding the application and respect of common sea tariffs and other common trade policy instruments. The Commission meets at least once a month, at the request of the Executive Agency Mercosur or a Member State. The Commission can make decisions on the management and implementation of trade policies decided within the framework of the Southern Common Market and, if necessary, submit proposals to the executive body to regulate the territories under its control; In addition, it may propose new guidelines or amend existing trade and customs guidelines under Mercosur. In this context, the Committee on Trade may propose a change in import duties on certain posts within the framework of common external tariffs, including cases related to the development of mercosur`s new production activities.

In order to better achieve its objectives, the Trade Commission can set up technical committees to manage and monitor the work it refines.

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