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Mercosur

In: Business and Management

Submitted By diced
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Getting to Know Mercosur
Zak K. Blondis
University of Memphis: Fogelman College of Business and Economics

Abstract This paper is a brief overview of Mercosur and its current state, and will focus on the background, formation, global and regional impact of Mercosur and its members as well as the current dilemmas that are being faced. Issues ranging from economic to political will be discussed throughout. Internal disputes and protectionist policies place Mercosur in an uncertain situation as they focus to defend their own domestic products all whilst maintaining a steady external trade. A continuing worldwide economic power house, Mercosur continues to struggle with certain facets of trade and political structure.

Background
South America throughout past decades has seen bloodshed and political instability, and despite much improvement there is still reoccurring corruption to date. Although the Pablo Escobar reign in Colombia, Noriega’s rule in Panama, and Castro’s hold on Cuba are no longer relevant, there still remains similar political instability today. Mercosur directly translated is Mercado Comun del Sur, or The Southern Common Market, and is a trade bloc for six of South America’s member nations (See Appendix A for current member countries) where they enjoy free trade, very similar to that of the North American Free Trade Agreement, where the goal is full South American economic integration. Enacted in 1991 under the Treaty of Ascuncion, Mercosur was created around the time of NAFTA, and other world trade blocs where they sought to fill the grey areas of GATT , General Agreement on Tariffs and Trade, that over looked regional, political, and cultural needs for its members (Kionsky, 2012). Further issues with non-transparent trades and non-uniformity in investments through GATT allowed for investors to make under the table trades where no tariffs...

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