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Economic Integration in Mercosur

In: Business and Management

Submitted By benniran
Words 961
Pages 4
With the variety of counties’ needs, the lack of economy in some countries and the importance of trade, some countries made an agreement named by MERCOSUR to coordinate their economic policies to gain benefits which are not possible otherwise. The agreement was signed in March 1991, among the following countries: Argentina, Brazil, Paraguay and Uruguay which was updated in 1994. The agreement main aim is to promote the free-trade and ease the movement of goods and services as well as currency. The MERCOSUR organization is considered as the 4th largest economy in the world coming after EU, NFTA and Japan, with GDP of $ 2.895 billion. The MERCOSUR organization strengthens the economic structure by providing extra policy tool to fulfill and realize the desired target as well as helping its members to compete for attracting the foreign direct investment which has a potential effect in economy and mainly helps in developing the infrastructure of the country. The organization plays also an important role in empowering the diplomatic relationship among the organization members, since the members have agreed to sign this agreement that means also they have made a custom union among themselves which will help to increase the exports and imports of the country due to the common external tariff. The agreement helped the MERCOSUR organization members to recover impressively from the financial crisis especially in Argentina which made a growth rate of 9.2 and currency reserves, the bank sector also made an impressive achievement by making a gradual return of depositor which has a potential effect on investment, as it is known the higher return of depositors, the more investors will be willing to invest. The MERCOSUR organization has been benefiting from the economic environment through free-trade and attracting foreign investors which both have helped to return the confidence to...

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