Mercosur: Another Failed Move Towards Regional Integration?
Author(s)
Preusse, Heinz G.
Abstract
In 1991, Argentina, Brazil, Paraguay and Uruguay decided to establish a Mercado Comun del Sur (Mercosur). During the second half of the 1990s, the completion of the customs union ran into increasing trouble and progress in the formation of a common market could not be realized. Two basic explanations of the poor performance of Mercosur are discussed. The first one claims that the adverse international situation is the main reason for the recent crisis. The second proposition emphasizes more fundamental deficiencies of the concept of open regionalism. Open regionalism is inherently instable because it facilitates a more efficient articulation of vested interests working against openness. Proceeding from a simple free trade agreement towards a common market tends to aggravate these problems. Obstacles to further regional integration in the Southern Cone are endogenous rather than exogenous. The normalization of the international economic environment may not be a sufficient condition for the revitalization of the integration process.
