MERCOSUR

Why in news?

• In a bid to contain the rising edible oil prices, India is looking to sign long-term contracts with MERCOSUR countries to import crude sunflower oil.
• Russia’s invasion of Ukraine has disrupted imports from Europe's second-largest nation, which has resulted in a sharp spike in edible oil prices.

What is Mercosur?

• Mercosur, officially Southern Common Market is a South American economic (trade) and political bloc.
• Mercosur was created in 1991 when Argentina, Brazil, Paraguay, and Uruguay signed the Treaty of Asuncion, an accord calling for the free movement of goods, services, and factors of production between countries.

Members:

• Its full members are Argentina, Brazil, Paraguay and Uruguay.
• Venezuela is a full member but has been suspended since December 1, 2016.
• Associate countries are Bolivia, Chile, Colombia, Ecuador, Guyana, Peru and Suriname.
• Observer countries are New Zealand and Mexico.

What are the objectives of Mercosur?

• Its main objective is to promote a common space that generates business and investment opportunities through the competitive integration of national economies into the international market.
• One of Mercosur’s early aims is to cement the strength of democracy in the region.

What is the nature of the trade block?

• It is now a full customs union and a trading bloc, in which there is free intra-zone trade and a common trade policy between member countries.
• The bloc comprises a population of more than 270 million people, and the combined GDP of USD 3.0 trillion a year, making Mercosur the fifth-largest economy in the World.

Add-On

• India has signed a preferential trade agreement (PTA) with Mercosur.

PRACTICE QUESTION

Which of the following countries are full time members of MERCOSUR

1. Argentina

2. Brazil

3. Mexico

4. Uruguay

Select the correct answer using the code given below:

(a) 1 and 3 only

(b) 2,3 and 4 only

(c) 1,2 and 4 only

(d) 1,2,3 and 4

Answer