Why in News?
MERCOSUR (Southern Common Market) is a major South American trade bloc recently making headlines due to its landmark free trade agreement with the European Union. It aims to boost economic integration among members amid global trade tensions.
Full Form and Formation
- Stands for Mercado Común del Sur (Southern Common Market).
- Founded in 1991 by Argentina, Brazil, Paraguay, and Uruguay via the Asunción Treaty to promote free trade and economic integration.
Member Countries
- Full members: Argentina, Brazil, Paraguay, Uruguay, Bolivia (joined fully in July 2024).
- Suspended: Venezuela (indefinitely since 2016).
- Associate members: Chile, Colombia, Ecuador, Guyana, Peru, Suriname, and Panama (joined December 2024).
Objectives and Structure
- Operates as a customs union and free-trade area, with ambitions to evolve into a common market like the EU.
- Population: Over 285 million; combined GDP: Nearly $3 trillion, making it the world's fifth-largest economic bloc.
- Headquarters: Montevideo, Uruguay.
Key Achievements and Challenges
- Early success: Intra-bloc trade grew tenfold in the 1990s.
- Challenges: Internal fractures (Paraguay's 2012 suspension), failure to fully integrate, and democracy concerns.
- Recent focus: Trade deals with EU and India to enhance competitiveness amid global uncertainty.
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