Origin and Perspectives of Common Market of South America (Mercosur)

This theoretical paper tries to illuminate the versatile journey of South American bloc i.e. Common Market of South America (Mercosur), its origin, principles, from Preferential Trade Agreement (PTA) to Custom Union (CU). After independence, leaders of Latin American decided to integrate at regional level to maintain peace and political stability in the region. Mercosur, an integration of the economies of the four countries of Argentina, Brazil, Paraguay and Uruguay, is set up in 1991 under the Treaty of Asuncion. Venezuela became its fifth member in 2012 and suspended in December 2015. Mercosur evolved after from the LAFTA (Latin America Free Trade Association) 1960, CACM (Central American Common Market) 1960, Caribbean Community 1969, CAN (Andean Pact/Community) 1969, LAIA (Latin America Integration Association) 1980, the integration and Economic Cooperation Programme between Brazil and Argentina of 1986, the Brazil-Argentina Integration, Cooperation and Development Treaty of 1988 and the Economic Cooperation Agreement 1990. In the end of 1994, Oreo Pareto Protocol laid down the organizational structure of Mercosur to manage the whole of it. Mercosur now operates as Custom Union and ambition to become common market.