By Mary Stokes.

Mercosur is South America’s largest trade bloc; Argentina, Brazil, Paraguay and Uruguay are full members. The bloc formed in 1991 with the aim of promoting free trade and economic integration. While Brazil’s trade with the rest of the bloc has grown in absolute terms (see chart below), Mercosur has hit a rough patch of late, and some are questioning its future.

Brazil’s trade with Mercosur has grown in absolute terms

The recent challenges to the bloc are political. Paraguay is in the midst of crisis given the June impeachment of its president. As a result, it was suspended from last month’s Mercosur summit, paving the way for Venezuela to become a full member. Venezuela’s entry, to be formalised on 31 July, is divisive as the country’s president, Hugo Chavez, is not a strong free trade proponent. According to Miriam Leitão and Valéria Maniero of O Globo, its entry could mean “the beginning of the end” of the bloc.

Tagged with:  
Share →