MERCOSUR and FTAA Essay Example | Topics and Well Written Essays - 2000 words

MERCOSUR and FTAA - Essay Example DP, climbed from $650 billion to $990 billion, and direct foreign investment soared from $2.6 billion to $20.24 billion.†(Merco Press 2006)It is the fourth largest integrated market after the European Union (EU), North American Free Trade Agreement (NAFTA) and ASEAN. Despite the setbacks like devaluation in Brazil and Argentine crisis hindering the sustained growth of the sector, the bloc continued to move forward. However the trading block has to face crucial tests with in connection with the Free Trade Area of the Americas (FTAA). This paper envisages bringing out the features and issues that makes the relationship between the block countries and the developed nations a difficult one especially in the political and economic sphere. MERCOSUR the â€Å"Common Market of the Southern Cone’ was formed by the Treaty of Asuncion and consists of Argentina, Brazil, Paraguay and Uruguay with Chile and Bolivia becoming associate members. â€Å"Its purpose is to establish a common market which would include the free movement of goods, services and factors of production, the elimination of customs duties and non-tariff restrictions, the establishment of a common external tariff and the adoption of a common trade policy, the coordination of positions in regional and international economic and commercial for a and the coordination of macro economic and sectoral policies amongst the member states in the areas of foreign trade, agriculture, industry, fiscal and monetary matters, foreign exchange and capital, services, customs, transport and communications and any other means that may have been agreed upon† (Malcolm Rowat, et al. 1997) There were several factors connected with the member countries which have stood in the way of the growth of MERCOSUR. While there was a possibility for building up regional integration for the clustering less developed smaller countries around a more developed and larger neighbouring country, this advantage could not be taken by MERCOSUR. This