Mercosur

Why in news?

• Preferential Trade agreements talks between India and Mercosur recently came to a standstill

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.

Who all are the members of Mercosur?

• 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 Gross Domestic Product of the full-member nations is in excess of US$3.0 trillion a year (Purchasing power parity, PPP) according to International Monetary Fund (IMF) numbers, making Mercosur the fifth-largest economy in the World.

Add-On

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

PRELIMS QUESTION

Which of the following countries are full members of the MERCOSUR Trading Bloc:
1.Brazil
2.Chile
3.Argentina
4.Paraguay 
Select the correct answer using the code given below:
(a)1 and 3 only
(b)1,3 and 4 only
(c)2 and 3 only
(d)1,2,3 and 4

Answer to Prelims Question