What Are The Main Economic Trade Agreements For The South American Countries

Some countries form RTAs for political reasons. Governments can seek trade agreements to promote peace or strengthen regional security. Countries may want to demonstrate good governance by imprisoning political and economic reforms through trade partnerships. Larger countries can use ATRs to forge new geopolitical alliances and strengthen diplomatic relations that could secure or reward political support. For example, the United States has established WITHDRS israel and Jordan to reaffirm U.S. support for these countries and strengthen relations with them. Some analysts believe that the choice of RTA partners is increasingly based on political and security concerns, not on economic reasons. (8) Andean governments want to guarantee access to the U.S. market, especially since their current trade preferences expire at the end of 2006. Andean governments also want to attract investment and see a free trade agreement with the United States as a way to create a safer economic environment and increase foreign investment. (30) However, Andean countries are largely opposed to a free trade agreement. The talks drew thousands of protesters to Colombia, Ecuador and Peru.

Opponents argue that any economic benefit of enhanced trade under a free trade agreement is achieved by only a small segment of the economy, which exacerbates class separation. They also claim that a large part of the Andean population is a poor peasant, who is particularly vulnerable and cannot compete with the increase in agricultural imports from the United States, which some Andean officials say are heavily subsidized. 39. (return) Washington Business Information, Inc., “Intellectual Property Remains a Problem for Proposed FTAA,” November 8, 2005. Mercosur was founded in March 1991 by Argentina, Brazil, Paraguay and Uruguay by the signing of the Treaty of Asuncian. One of the objectives of the treaty was the creation of a common market with the free movement of goods, services and production; the adoption of a common external tariff and a common trade policy; coordination of macroeconomic and sectoral policies; and harmonization of legislation in areas that promote greater integration. However, Mercosur`s economies have recently expressed their willingness to open up to other markets and conclude a pioneering trade agreement with the European Union in 2019, after lengthy negotiations. If it were to be ratified, it would be the largest free trade agreement in the world. For much of the 1990s, Mercosur was the most dynamic economic subgroup in the Western Hemisphere in terms of trade growth among its members. Things changed at the end of the decade, when Brazil faced a financial crisis and the devaluation of the Brazilian real in 1999. The economic situation also affected Argentina, causing a serious political financial crisis that ended the presidency of Fernando de la Rua.

The slowdown in the economies of both countries has led to a decrease in the momentum towards further integration. Some questioned whether trade liberalization was partly responsible for economic crises and whether further liberalization was feasible or beneficial to the economy. (45) Brazil defended Venezuela`s accession to the bloc in 2012 and said that the inclusion of the oil-rich country would make Mercosur a “global energy powerhouse”.” But falling oil prices, poor economic management and an increasingly authoritarian government have plunged Venezuela into an economic, political and humanitarian crisis.