Mercosur
Overview
Mercosur or Mercosul is an economic and political agreement among Argentina
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...

, Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...

, Paraguay
Paraguay
Paraguay , officially the Republic of Paraguay , is a landlocked country in South America. It is bordered by Argentina to the south and southwest, Brazil to the east and northeast, and Bolivia to the northwest. Paraguay lies on both banks of the Paraguay River, which runs through the center of the...

 and Uruguay
Uruguay
Uruguay ,officially the Oriental Republic of Uruguay,sometimes the Eastern Republic of Uruguay; ) is a country in the southeastern part of South America. It is home to some 3.5 million people, of whom 1.8 million live in the capital Montevideo and its metropolitan area...

. Founded in 1991 by the Treaty of Asunción
Treaty of Asunción
The Treaty of Asunción was a treaty between the countries of Argentina, Brazil, Paraguay, and Uruguay signed on March 26, 1991. The objective of the treaty, signed in Asunción, was to establish a common market among the participating countries, popularly called Mercosur...

, which was later amended and updated by the 1994 Treaty of Ouro Preto. Its purpose is to promote free trade
Free trade
Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from...

 and the fluid movement of goods, people, and currency. The official languages are Portuguese
Portuguese language
Portuguese is a Romance language that arose in the medieval Kingdom of Galicia, nowadays Galicia and Northern Portugal. The southern part of the Kingdom of Galicia became independent as the County of Portugal in 1095...

, Guaraní
Guaraní language
Guaraní, specifically the primary variety known as Paraguayan Guaraní , is an indigenous language of South America that belongs to the Tupí–Guaraní subfamily of the Tupian languages. It is one of the official languages of Paraguay , where it is spoken by the majority of the population, and half of...

 and Spanish
Spanish language
Spanish , also known as Castilian , is a Romance language in the Ibero-Romance group that evolved from several languages and dialects in central-northern Iberia around the 9th century and gradually spread with the expansion of the Kingdom of Castile into central and southern Iberia during the...

. It has been updated, amended, and changed many times since. It is now a full customs union
Customs union
A customs union is a type of trade bloc which is composed of a free trade area with a common external tariff. The participant countries set up common external trade policy, but in some cases they use different import quotas...

.
Encyclopedia
Mercosur or Mercosul is an economic and political agreement among Argentina
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...

, Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...

, Paraguay
Paraguay
Paraguay , officially the Republic of Paraguay , is a landlocked country in South America. It is bordered by Argentina to the south and southwest, Brazil to the east and northeast, and Bolivia to the northwest. Paraguay lies on both banks of the Paraguay River, which runs through the center of the...

 and Uruguay
Uruguay
Uruguay ,officially the Oriental Republic of Uruguay,sometimes the Eastern Republic of Uruguay; ) is a country in the southeastern part of South America. It is home to some 3.5 million people, of whom 1.8 million live in the capital Montevideo and its metropolitan area...

. Founded in 1991 by the Treaty of Asunción
Treaty of Asunción
The Treaty of Asunción was a treaty between the countries of Argentina, Brazil, Paraguay, and Uruguay signed on March 26, 1991. The objective of the treaty, signed in Asunción, was to establish a common market among the participating countries, popularly called Mercosur...

, which was later amended and updated by the 1994 Treaty of Ouro Preto. Its purpose is to promote free trade
Free trade
Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from...

 and the fluid movement of goods, people, and currency. The official languages are Portuguese
Portuguese language
Portuguese is a Romance language that arose in the medieval Kingdom of Galicia, nowadays Galicia and Northern Portugal. The southern part of the Kingdom of Galicia became independent as the County of Portugal in 1095...

, Guaraní
Guaraní language
Guaraní, specifically the primary variety known as Paraguayan Guaraní , is an indigenous language of South America that belongs to the Tupí–Guaraní subfamily of the Tupian languages. It is one of the official languages of Paraguay , where it is spoken by the majority of the population, and half of...

 and Spanish
Spanish language
Spanish , also known as Castilian , is a Romance language in the Ibero-Romance group that evolved from several languages and dialects in central-northern Iberia around the 9th century and gradually spread with the expansion of the Kingdom of Castile into central and southern Iberia during the...

. It has been updated, amended, and changed many times since. It is now a full customs union
Customs union
A customs union is a type of trade bloc which is composed of a free trade area with a common external tariff. The participant countries set up common external trade policy, but in some cases they use different import quotas...

. Mercosur and the Andean Community of Nations
Andean Community of Nations
The Andean Community is a customs union comprising the South American countries of Bolivia, Colombia, Ecuador and Peru. The trade bloc was called the Andean Pact until 1996 and came into existence with the signing of the Cartagena Agreement in 1969...

 are customs unions that are components of a continuing process of South America
South America
South America is a continent situated in the Western Hemisphere, mostly in the Southern Hemisphere, with a relatively small portion in the Northern Hemisphere. The continent is also considered a subcontinent of the Americas. It is bordered on the west by the Pacific Ocean and on the north and east...

n integration
Economic integration
Economic integration refers to trade unification between different states by the partial or full abolishing of customs tariffs on trade taking place within the borders of each state...

 connected to the Union of South American Nations.

Mercosur origins trace back to 1985 when Presidents Raúl Alfonsín
Raúl Alfonsín
Raúl Ricardo Alfonsín was an Argentine lawyer, politician and statesman, who served as the President of Argentina from December 10, 1983, to July 8, 1989. Alfonsín was the first democratically-elected president of Argentina following the military government known as the National Reorganization...

 of Argentina and José Sarney
José Sarney
José Sarney de Araújo Costa is a Brazilian lawyer, writer and politician. He served as president of Brazil from 15 March 1985 to 15 March 1990....

 of Brazil signed the Argentina-Brazil Integration and Economics Cooperation Program or PICE (Portuguese
Portuguese language
Portuguese is a Romance language that arose in the medieval Kingdom of Galicia, nowadays Galicia and Northern Portugal. The southern part of the Kingdom of Galicia became independent as the County of Portugal in 1095...

: Programa de Integração e Cooperação Econômica Argentina-Brasil, Spanish
Spanish language
Spanish , also known as Castilian , is a Romance language in the Ibero-Romance group that evolved from several languages and dialects in central-northern Iberia around the 9th century and gradually spread with the expansion of the Kingdom of Castile into central and southern Iberia during the...

: Programa de Integración y Cooperación Económica Argentina-Brasil). The program also proposed the Gaucho
Gaucho (currency)
The Gaucho was the name of a currency intended to be used by Argentina and Brazil in the context of the Argentina-Brazil Integration and Economics Cooperation Program or PICE to make interregional payments...

 as a currency for regional trade.

Bolivia
Bolivia
Bolivia officially known as Plurinational State of Bolivia , is a landlocked country in central South America. It is the poorest country in South America...

, Chile
Chile
Chile ,officially the Republic of Chile , is a country in South America occupying a long, narrow coastal strip between the Andes mountains to the east and the Pacific Ocean to the west. It borders Peru to the north, Bolivia to the northeast, Argentina to the east, and the Drake Passage in the far...

, Colombia
Colombia
Colombia, officially the Republic of Colombia , is a unitary constitutional republic comprising thirty-two departments. The country is located in northwestern South America, bordered to the east by Venezuela and Brazil; to the south by Ecuador and Peru; to the north by the Caribbean Sea; to the...

, Ecuador
Ecuador
Ecuador , officially the Republic of Ecuador is a representative democratic republic in South America, bordered by Colombia on the north, Peru on the east and south, and by the Pacific Ocean to the west. It is one of only two countries in South America, along with Chile, that do not have a border...

 and Peru
Peru
Peru , officially the Republic of Peru , is a country in western South America. It is bordered on the north by Ecuador and Colombia, on the east by Brazil, on the southeast by Bolivia, on the south by Chile, and on the west by the Pacific Ocean....

 currently have associate member status. Venezuela
Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...

 signed a membership agreement on 17 June 2006. The founding of the Mercosur Parliament
Mercosur Parliament
The Mercosur Parliament is the parliamentary institution of the Mercosur trade bloc. It is composed of 81 MPs, 18 from each member states of the bloc – Argentina, Brazil, Paraguay and Uruguay – and 9 from applying member Venezuela...

 was agreed at the December 2004 presidential summit. It should have 18 representatives from each country by 2010, regardless of population.

Member states

Mercosur is composed of 4 sovereign
Sovereign state
A sovereign state, or simply, state, is a state with a defined territory on which it exercises internal and external sovereignty, a permanent population, a government, and the capacity to enter into relations with other sovereign states. It is also normally understood to be a state which is neither...

 member states: Argentina
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...

, Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...

, Paraguay
Paraguay
Paraguay , officially the Republic of Paraguay , is a landlocked country in South America. It is bordered by Argentina to the south and southwest, Brazil to the east and northeast, and Bolivia to the northwest. Paraguay lies on both banks of the Paraguay River, which runs through the center of the...

, and Uruguay
Uruguay
Uruguay ,officially the Oriental Republic of Uruguay,sometimes the Eastern Republic of Uruguay; ) is a country in the southeastern part of South America. It is home to some 3.5 million people, of whom 1.8 million live in the capital Montevideo and its metropolitan area...

.

Venezuela
Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...

 will become the fifth full member country after Paraguay's congress ratification, all other members have ratified Venezuela's full membership.

Geography

The territory of Mercosur consists of the combined territories of its 4 member states and their population. The territory of Mercosur is not the same as that of South America
Geography of South America
The geography of South America contains many diverse regions and climates. Geographically, South America is generally considered a continent forming the southern portion of the American landmass, south and east of the Panama-Colombia border by most authorities, or south and east of the Panama Canal...

, as parts of the continent are outside Mercosur, such as Peru
Peru
Peru , officially the Republic of Peru , is a country in western South America. It is bordered on the north by Ecuador and Colombia, on the east by Brazil, on the southeast by Bolivia, on the south by Chile, and on the west by the Pacific Ocean....

, Colombia
Colombia
Colombia, officially the Republic of Colombia , is a unitary constitutional republic comprising thirty-two departments. The country is located in northwestern South America, bordered to the east by Venezuela and Brazil; to the south by Ecuador and Peru; to the north by the Caribbean Sea; to the...

 and Chile
Chile
Chile ,officially the Republic of Chile , is a country in South America occupying a long, narrow coastal strip between the Andes mountains to the east and the Pacific Ocean to the west. It borders Peru to the north, Bolivia to the northeast, Argentina to the east, and the Drake Passage in the far...

.

Including the overseas territories of member states, Mercosur experiences most types of climate
Köppen climate classification
The Köppen climate classification is one of the most widely used climate classification systems. It was first published by Crimea German climatologist Wladimir Köppen in 1884, with several later modifications by Köppen himself, notably in 1918 and 1936...

 from Arctic
Polar climate
Regions with a polar climate are characterized by a lack of warm summers . Regions with polar climate cover over 20% of the Earth. The sun shines 24 hours in the summer, and barely ever shines at all in the winter...

 to tropical
Tropical climate
A tropical climate is a climate of the tropics. In the Köppen climate classification it is a non-arid climate in which all twelve months have mean temperatures above...

, rendering meteorological averages for Mercosur as a whole meaningless. The majority of the population lives in areas with a subtropical climate (Uruguay, Southern Paraguay, Northeastern Argentina and Southern and Southeastern Brazil), or a tropical climate
Tropical climate
A tropical climate is a climate of the tropics. In the Köppen climate classification it is a non-arid climate in which all twelve months have mean temperatures above...

 (Northeastern Brazil).

Demographics

The combined population
Population
A population is all the organisms that both belong to the same group or species and live in the same geographical area. The area that is used to define a sexual population is such that inter-breeding is possible between any pair within the area and more probable than cross-breeding with individuals...

 of all 4 member states
Sovereign state
A sovereign state, or simply, state, is a state with a defined territory on which it exercises internal and external sovereignty, a permanent population, a government, and the capacity to enter into relations with other sovereign states. It is also normally understood to be a state which is neither...

 has been estimated at 242,032,800 as of July 2009. The most populous country of Mercosur is, by a significant margin, Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...

 (191,241,714). The remaining member states' populations are, in decreasing order: Argentina
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...

 (40,482,000), Paraguay
Paraguay
Paraguay , officially the Republic of Paraguay , is a landlocked country in South America. It is bordered by Argentina to the south and southwest, Brazil to the east and northeast, and Bolivia to the northwest. Paraguay lies on both banks of the Paraguay River, which runs through the center of the...

 (6,831,306), and Uruguay
Uruguay
Uruguay ,officially the Oriental Republic of Uruguay,sometimes the Eastern Republic of Uruguay; ) is a country in the southeastern part of South America. It is home to some 3.5 million people, of whom 1.8 million live in the capital Montevideo and its metropolitan area...

 (3,477,780). The population density
Population density
Population density is a measurement of population per unit area or unit volume. It is frequently applied to living organisms, and particularly to humans...

 is of 22.0/km² (57/sq mi) in Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...

, 19.4/km² (50.2/sq mi) in Uruguay
Uruguay
Uruguay ,officially the Oriental Republic of Uruguay,sometimes the Eastern Republic of Uruguay; ) is a country in the southeastern part of South America. It is home to some 3.5 million people, of whom 1.8 million live in the capital Montevideo and its metropolitan area...

, 15.6/km² (40.4/sq mi) in Paraguay
Paraguay
Paraguay , officially the Republic of Paraguay , is a landlocked country in South America. It is bordered by Argentina to the south and southwest, Brazil to the east and northeast, and Bolivia to the northwest. Paraguay lies on both banks of the Paraguay River, which runs through the center of the...

, and 14.3/km² (37/sq mi) in Argentina
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...

. The largest cities of Mercosur are São Paulo
São Paulo
São Paulo is the largest city in Brazil, the largest city in the southern hemisphere and South America, and the world's seventh largest city by population. The metropolis is anchor to the São Paulo metropolitan area, ranked as the second-most populous metropolitan area in the Americas and among...

, Buenos Aires
Buenos Aires
Buenos Aires is the capital and largest city of Argentina, and the second-largest metropolitan area in South America, after São Paulo. It is located on the western shore of the estuary of the Río de la Plata, on the southeastern coast of the South American continent...

, and Rio de Janeiro
Rio de Janeiro
Rio de Janeiro , commonly referred to simply as Rio, is the capital city of the State of Rio de Janeiro, the second largest city of Brazil, and the third largest metropolitan area and agglomeration in South America, boasting approximately 6.3 million people within the city proper, making it the 6th...

. The White
White people
White people is a term which usually refers to human beings characterized, at least in part, by the light pigmentation of their skin...

 population is the majority in Brazil, Argentina and Uruguay while the Mestizo
Mestizo
Mestizo is a term traditionally used in Latin America, Philippines and Spain for people of mixed European and Native American heritage or descent...

 population is majority in Paraguay.

Languages

Among the many languages and dialects used in Mercosur, it has 3 official
Official language
An official language is a language that is given a special legal status in a particular country, state, or other jurisdiction. Typically a nation's official language will be the one used in that nation's courts, parliament and administration. However, official status can also be used to give a...

 and working language
Working language
A working language is a language that is given a unique legal status in a supra-national company, society, state or other body or organization as its primary mean of communication...

s: Portuguese
Portuguese language
Portuguese is a Romance language that arose in the medieval Kingdom of Galicia, nowadays Galicia and Northern Portugal. The southern part of the Kingdom of Galicia became independent as the County of Portugal in 1095...

, Spanish
Spanish language
Spanish , also known as Castilian , is a Romance language in the Ibero-Romance group that evolved from several languages and dialects in central-northern Iberia around the 9th century and gradually spread with the expansion of the Kingdom of Castile into central and southern Iberia during the...

 and Guaraní
Guaraní language
Guaraní, specifically the primary variety known as Paraguayan Guaraní , is an indigenous language of South America that belongs to the Tupí–Guaraní subfamily of the Tupian languages. It is one of the official languages of Paraguay , where it is spoken by the majority of the population, and half of...

. Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...

 is the only Portuguese-speaking country in Mercosur and in the Americas, as it formerly was part of Portuguese America. Argentina, Paraguay, and Uruguay were part of Spanish America. Along with Paraguay (where it is one of two official languages), sectors of Argentina and Brazil speak Guarani.

Objectives

The Southern Common Market promotes:
  • The free
    Free will
    "To make my own decisions whether I am successful or not due to uncontrollable forces" -Troy MorrisonA pragmatic definition of free willFree will is the ability of agents to make choices free from certain kinds of constraints. The existence of free will and its exact nature and definition have long...

     transit of produced goods, services and factors
    Factors of production
    In economics, factors of production means inputs and finished goods means output. Input determines the quantity of output i.e. output depends upon input. Input is the starting point and output is the end point of production process and such input-output relationship is called a production function...

     among the member states. Among other things, this includes the elimination of customs
    Customs
    Customs is an authority or agency in a country responsible for collecting and safeguarding customs duties and for controlling the flow of goods including animals, transports, personal effects and hazardous items in and out of a country...

     rights
    Rights
    Rights are legal, social, or ethical principles of freedom or entitlement; that is, rights are the fundamental normative rules about what is allowed of people or owed to people, according to some legal system, social convention, or ethical theory...

     and lifting of nontariff restrictions on the transit of goods or any other measures with similar effects;
  • Fixing of a common external tariff
    Tariff
    A tariff may be either tax on imports or exports , or a list or schedule of prices for such things as rail service, bus routes, and electrical usage ....

     (CET) and adopting of a common trade policy
    Commercial policy
    A commercial policy is a governmental policy governing trade with third countries...

     with regard to nonmember states or groups of states, and the coordination of positions in regional and international commercial and economic meetings;
  • Coordination of macroeconomic and sectorial policies of member states relating to foreign trade, agriculture
    Agriculture
    Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...

    , industry
    Industry
    Industry refers to the production of an economic good or service within an economy.-Industrial sectors:There are four key industrial economic sectors: the primary sector, largely raw material extraction industries such as mining and farming; the secondary sector, involving refining, construction,...

    , tax
    Tax
    To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...

    es, monetary system
    Monetary system
    A monetary system is anything that is accepted as a standard of value and measure of wealth in a particular region.However, the current trend is to use international trade and investment to alter the policy and legislation of individual governments. The best recent example of this policy is the...

    , exchange
    Foreign exchange market
    The foreign exchange market is a global, worldwide decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends...

     and capital
    Capital (economics)
    In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...

    , services, customs, transport
    Transport
    Transport or transportation is the movement of people, cattle, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline, and space. The field can be divided into infrastructure, vehicles, and operations...

     and communications, and any others they may agree on, in order to ensure free competition between member states;
  • The commitment by the member states to make the necessary adjustments to their laws in pertinent areas to allow for the strengthening of the integration
    Economic integration
    Economic integration refers to trade unification between different states by the partial or full abolishing of customs tariffs on trade taking place within the borders of each state...

     process
    Business process
    A business process or business method is a collection of related, structured activities or tasks that produce a specific service or product for a particular customer or customers...

    . The Asunción Treaty
    Treaty of Asunción
    The Treaty of Asunción was a treaty between the countries of Argentina, Brazil, Paraguay, and Uruguay signed on March 26, 1991. The objective of the treaty, signed in Asunción, was to establish a common market among the participating countries, popularly called Mercosur...

     is based on the doctrine of the reciprocal rights and obligations of the member states. Mercosur initially targeted free-trade zones, then customs unification, and finally a common market. The common market will allow (in addition to customs unification) the free movement of manpower and capital across the member nations, and depends the grating of equal rights and duties to all member countries. Because member states will implement the trade
    Trade
    Trade is the transfer of ownership of goods and services from one person or entity to another. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and...

     liberalization
    Liberalization
    In general, liberalization refers to a relaxation of previous government restrictions, usually in areas of social or economic policy. In some contexts this process or concept is often, but not always, referred to as deregulation...

     at different speeds, during the transition period the rights and obligation
    Obligation
    An obligation is a requirement to take some course of action, whether legal or moral. There are also obligations in other normative contexts, such as obligations of etiquette, social obligations, and possibly...

    s of each party will initially be equivalent but not necessarily equal. In addition to the reciprocity doctrine, the Asunción Treaty also contains provisions for the most-favored nation concept. This concept is that after the common market is formed, member nations are to automatically extend to the other members any advantage, favor, entitlement, immunity or privilege granted to a product originating from or intended for countries that are not party to the Latin American Integration Association
    Latin American Integration Association
    The Asociación Latinoamericana de Integración is a Latin American trade integration association, based in Montevideo. Its main objective is the establishment of a common market, in pursuit of the economic and social development of the region...

     (ALADI).

Structure

The Asunción Treaty
Treaty of Asunción
The Treaty of Asunción was a treaty between the countries of Argentina, Brazil, Paraguay, and Uruguay signed on March 26, 1991. The objective of the treaty, signed in Asunción, was to establish a common market among the participating countries, popularly called Mercosur...

 and Ouro Preto Protocol
Protocol of Ouro Preto
The 1994 Protocol of Ouro Preto was the continuation of economic policies setting up a customs union, as set forth four years earlier in the Treaty of Asuncion by the four original Mercosur states....

 established the basis for the institutional Mercosur structure
Structure
Structure is a fundamental, tangible or intangible notion referring to the recognition, observation, nature, and permanence of patterns and relationships of entities. This notion may itself be an object, such as a built structure, or an attribute, such as the structure of society...

, creating the Common Market Council and the Common Market Group, both of which are to function at the outset of the transition phase. As provided for in this Treaty, before establishing the common market the member nation
Nation
A nation may refer to a community of people who share a common language, culture, ethnicity, descent, and/or history. In this definition, a nation has no physical borders. However, it can also refer to people who share a common territory and government irrespective of their ethnic make-up...

s must call a special meeting in order to determine the definitive institutional structure for the public agencies managing Mercosur, as well as define the specific functions of each agency and the decision making process.

Common Market Council

The Council is the highest-level agency of Mercosur with authority
Authority
The word Authority is derived mainly from the Latin word auctoritas, meaning invention, advice, opinion, influence, or command. In English, the word 'authority' can be used to mean power given by the state or by academic knowledge of an area .-Authority in Philosophy:In...

 to conduct its policy
Policy
A policy is typically described as a principle or rule to guide decisions and achieve rational outcome. The term is not normally used to denote what is actually done, this is normally referred to as either procedure or protocol...

, and responsibility for compliance with the objects and time frames set forth in the Asuncion Treaty. The Council is composed of the Ministers of Foreign Affairs and the Economy
Economy
An economy consists of the economic system of a country or other area; the labor, capital and land resources; and the manufacturing, trade, distribution, and consumption of goods and services of that area...

 (or the equivalent) of all five countries. Member states preside over the Council in rotating alphabetical order, for 6-month periods. Meetings: Councilmembers shall meet whenever necessary, but at least once a year. The president
President
A president is a leader of an organization, company, trade union, university, or country.Etymologically, a president is one who presides, who sits in leadership...

s of the member nations shall partake of the annual Common Market Council meeting whenever possible. Decision Making: Council decision
Decision making
Decision making can be regarded as the mental processes resulting in the selection of a course of action among several alternative scenarios. Every decision making process produces a final choice. The output can be an action or an opinion of choice.- Overview :Human performance in decision terms...

s shall be made by consensus, with representation of all member states.

Common Market Group

The Group is the executive
Executive (government)
Executive branch of Government is the part of government that has sole authority and responsibility for the daily administration of the state bureaucracy. The division of power into separate branches of government is central to the idea of the separation of powers.In many countries, the term...

 body of Mercosur, and is coordinated by the Ministries of Foreign Affairs of the member states. Its basic duties are to cause compliance with the Asuncion Treaty and to take resolution
Resolution (law)
A resolution is a written motion adopted by a deliberative body. The substance of the resolution can be anything that can normally be proposed as a motion. For long or important motions, though, it is often better to have them written out so that discussion is easier or so that it can be...

s required for implementation of the decisions made by the Council. Furthermore, it can initiate practical measures for trade opening, coordination of macroeconomic policies, and negotiation of agreements with nonmember states and international agencies, participating when need be in resolution of controversies under Mercosur. It has the authority to organize, coordinate and supervise Work Subgroups and to call special meetings to deal with issues of interest. Composition: The Common Market Group shall be made up of four permanent members and four alternates from each member state, representing the following public
Public
In public relations and communication science, publics are groups of individuals, and the public is the totality of such groupings. This is a different concept to the sociological concept of the Öffentlichkeit or public sphere. The concept of a public has also been defined in political science,...

 agencies
Government agency
A government or state agency is a permanent or semi-permanent organization in the machinery of government that is responsible for the oversight and administration of specific functions, such as an intelligence agency. There is a notable variety of agency types...

: (i) the Ministry of Foreign Affairs; (ii) the Ministry of Economy, or the equivalent (from industry, foreign affairs and/or economic coordination); and (iii) the Central Bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...

. The members of the Common Market Group appointed by a given member state will constitute the National Section of the Common Market Group for that particular nation. Meetings: The Common Market Group will meet ordinarily at least once every quarter in the member states, in rotating alphabetical order. Special meetings may be freely called at any time, at any previously scheduled place. The meetings will be coordinated by the Head of the Delegation of the host member state. Decision Making: Common Market Group decisions shall be made by consensus, with the representation of all member states. The official Mercosur language
Language
Language may refer either to the specifically human capacity for acquiring and using complex systems of communication, or to a specific instance of such a system of complex communication...

s will be Portuguese
Portuguese language
Portuguese is a Romance language that arose in the medieval Kingdom of Galicia, nowadays Galicia and Northern Portugal. The southern part of the Kingdom of Galicia became independent as the County of Portugal in 1095...

 and Spanish
Spanish language
Spanish , also known as Castilian , is a Romance language in the Ibero-Romance group that evolved from several languages and dialects in central-northern Iberia around the 9th century and gradually spread with the expansion of the Kingdom of Castile into central and southern Iberia during the...

, and the official version of all work papers will be prepared in the language of the country hosting the meeting.

Administrative and socioeconomic

The Administrative Office
Office
An office is generally a room or other area in which people work, but may also denote a position within an organization with specific duties attached to it ; the latter is in fact an earlier usage, office as place originally referring to the location of one's duty. When used as an adjective, the...

 will keep document
Document
The term document has multiple meanings in ordinary language and in scholarship. WordNet 3.1. lists four meanings :* document, written document, papers...

s and issue the Mercosur official bulletin in both Portuguese and Spanish, and will also be charged with communicating the activities of the Common Market Group so as to allow for the maximum disclosure of decisions and the relevant documentation. The Socioeconomic Advisory
Guidance
Guidance may refer to:*Guidance *Guidance system*Guidance Solutions, an eCommerce development company*"Guidance", an episode of Death Note...

 Forum
Forum (legal)
A public forum is a United States constitutional law term that describes a government-owned property that is open to public expression and assembly.-Types:Forums are classified as public or nonpublic....

 is consultative by nature, and represents the various socioeconomic sector
Economic sector
An economy may include several sectors , that evolved in successive phases.* The ancient economy was mainly based on subsistence farming....

s of the member nations.

Work Subgroups

Directly subordinated to the Common Market Group, the Work
Work
Work may refer to:Human labor:* Employment* House work* Labor , measure of the work done by human beings* Manual labor, physical work done by people* Wage labor, in which a worker sells their labor and an employer buys it...

Subgroup
Subgroup
In group theory, given a group G under a binary operation *, a subset H of G is called a subgroup of G if H also forms a group under the operation *. More precisely, H is a subgroup of G if the restriction of * to H x H is a group operation on H...

s draw up the minutes of the decisions to be submitted for the consideration of the Council, and conduct studies on specific Mercosur concerns. Currently, the Work Subgroups are the following: Commercial Matters; Customs Matters; Technical Standards; Tax and Monetary Policies Relating to Trade; Land
Land (economics)
In economics, land comprises all naturally occurring resources whose supply is inherently fixed. Examples are any and all particular geographical locations, mineral deposits, and even geostationary orbit locations and portions of the electromagnetic spectrum. Natural resources are fundamental to...

 Transport
Transport
Transport or transportation is the movement of people, cattle, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline, and space. The field can be divided into infrastructure, vehicles, and operations...

; Sea
Sea
A sea generally refers to a large body of salt water, but the term is used in other contexts as well. Most commonly, it means a large expanse of saline water connected with an ocean, and is commonly used as a synonym for ocean...

 Transport
Transport
Transport or transportation is the movement of people, cattle, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline, and space. The field can be divided into infrastructure, vehicles, and operations...

; Industrial and Technology Policies; Agricultural Policy
Policy
A policy is typically described as a principle or rule to guide decisions and achieve rational outcome. The term is not normally used to denote what is actually done, this is normally referred to as either procedure or protocol...

; Energy
Energy
In physics, energy is an indirectly observed quantity. It is often understood as the ability a physical system has to do work on other physical systems...

 Policy
Policy
A policy is typically described as a principle or rule to guide decisions and achieve rational outcome. The term is not normally used to denote what is actually done, this is normally referred to as either procedure or protocol...

; Coordination of Macroeconomic Policies; and Labor
Labour economics
Labor economics seeks to understand the functioning and dynamics of the market for labor. Labor markets function through the interaction of workers and employers...

, Employment
Employment
Employment is a contract between two parties, one being the employer and the other being the employee. An employee may be defined as:- Employee :...

 and Social Security
Social security
Social security is primarily a social insurance program providing social protection or protection against socially recognized conditions, including poverty, old age, disability, unemployment and others. Social security may refer to:...

 Matters. Meetings. The meetings of the Work subgroups will be held quarterly, alternating in every member state, in alphabetical order, or at the Common Market Group Administrative Office. Activities will be carried out by the Work Subgroups in two stages: preparatory and conclusive. In the preparatory stage, the members of the Work Subgroups may request the participation of representatives from the private sector of each member state. The decision-making stage is reserved exclusively for official representatives of the member states. The delegations of representatives from the private sector in the preparatory stage of the Work Subgroup activities will have a maximum of three representatives for each member state directly involved in any of the stages of the production, distribution or consumption process for the products that fall within the scope of the subgroup's activities.

Joint Parliamentary Committee

The Committee
Committee
A committee is a type of small deliberative assembly that is usually intended to remain subordinate to another, larger deliberative assembly—which when organized so that action on committee requires a vote by all its entitled members, is called the "Committee of the Whole"...

 will have both an advisory and decision-making nature, with powers to submit proposals as well. It will be competent, inter alia, to: follow up on the integration
Regional integration
Regional integration is a process in which states enter into a regional agreement in order to enhance regional cooperation through regional institutions and rules...

 process and keep the respective Congress
Congress
A congress is a formal meeting of the representatives of different nations, constituent states, independent organizations , or groups....

es informed; Take the necessary steps for the future instatement of a Mercosur parliament
Mercosur Parliament
The Mercosur Parliament is the parliamentary institution of the Mercosur trade bloc. It is composed of 81 MPs, 18 from each member states of the bloc – Argentina, Brazil, Paraguay and Uruguay – and 9 from applying member Venezuela...

; Organize subcommittees to examine matters relating to the integration process; Submit its recommendations to the Common Market Council and Group as to how the integration process should be conducted and Southern Common Market formed; Make the adjustments necessary to harmonize the laws of the different member states and submit them to the respective Congresses; Establish relationships with private
Private property
Private property is the right of persons and firms to obtain, own, control, employ, dispose of, and bequeath land, capital, and other forms of property. Private property is distinguishable from public property, which refers to assets owned by a state, community or government rather than by...

 entities in each of the member states, as well as international agencies and bureaus so as to obtain information and specialized assistance with matters of interest: Establish relationships targeting cooperation with Congresses of the nonmember nations and entities involved in regional integration schemes; Subscribe to cooperation and technical assistance accords with public and/or private entities whether domestic
Domestic policy
Domestic policy, also known as public policy, presents decisions, laws, and programs made by the government which are directly related to all issues and activity within the country....

, supranational or international
International
----International mostly means something that involves more than one country. The term international as a word means involvement of, interaction between or encompassing more than one nation, or generally beyond national boundaries...

. The Committee will be composed of a maximum of 64 acting parliamentary member
Member of Parliament
A Member of Parliament is a representative of the voters to a :parliament. In many countries with bicameral parliaments, the term applies specifically to members of the lower house, as upper houses often have a different title, such as senate, and thus also have different titles for its members,...

s, 16 per member state
Sovereign state
A sovereign state, or simply, state, is a state with a defined territory on which it exercises internal and external sovereignty, a permanent population, a government, and the capacity to enter into relations with other sovereign states. It is also normally understood to be a state which is neither...

, and an equal number of alternates, appointed by the Congress to which they pertain, and with a term of office of at least two years. The meetings shall be conducted by a directors' board consisting of four Presidents (one for each member state). The Committee will ordinarily meet twice a year, and extraordinarily whenever summoned by any of its five President
President
A president is a leader of an organization, company, trade union, university, or country.Etymologically, a president is one who presides, who sits in leadership...

s. Meetings are to be held in the territory of each member state on a successive and alternating basis. Decision Making: Meetings of the Joint Parliamentary Committee will only be valid when attended by parliamentary delegations from all member states. Decisions by the Joint Parliamentary Committee will be made by consensus vote of the majority of the members accredited by the respective Congresses of each member state. Portuguese
Portuguese language
Portuguese is a Romance language that arose in the medieval Kingdom of Galicia, nowadays Galicia and Northern Portugal. The southern part of the Kingdom of Galicia became independent as the County of Portugal in 1095...

 and Spanish
Spanish language
Spanish , also known as Castilian , is a Romance language in the Ibero-Romance group that evolved from several languages and dialects in central-northern Iberia around the 9th century and gradually spread with the expansion of the Kingdom of Castile into central and southern Iberia during the...

 are the official language
Language
Language may refer either to the specifically human capacity for acquiring and using complex systems of communication, or to a specific instance of such a system of complex communication...

s of the Joint
Joint
A joint is the location at which two or more bones make contact. They are constructed to allow movement and provide mechanical support, and are classified structurally and functionally.-Classification:...

 Parliamentary Committee
Committee
A committee is a type of small deliberative assembly that is usually intended to remain subordinate to another, larger deliberative assembly—which when organized so that action on committee requires a vote by all its entitled members, is called the "Committee of the Whole"...

.

Trade Commission

The Trade Commission will assist the Mercosur executive body, always striving to apply the instruments of common trade
Trade
Trade is the transfer of ownership of goods and services from one person or entity to another. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and...

 policy
Policy
A policy is typically described as a principle or rule to guide decisions and achieve rational outcome. The term is not normally used to denote what is actually done, this is normally referred to as either procedure or protocol...

 agreed to by the member states for operation of the customs
Customs
Customs is an authority or agency in a country responsible for collecting and safeguarding customs duties and for controlling the flow of goods including animals, transports, personal effects and hazardous items in and out of a country...

 unification. Additionally, the commission should also follow up on the development of issues and matters related to common trade policies, the intra-Mercosur trade and trade with other countries. The commission
Constitutional Commission
Many entities have been called a Constitutional Commission with the general purpose of reviewing a constitution, or planning to create one.-Afghanistan:*Afghan Constitution Commission**Timeline of the War in Afghanistan...

 will have five actual members and four alternates, with each member nation's indicating a member. The Trade Commission shall exert every effort to apply common trade policy instruments such as: Trade
Trade
Trade is the transfer of ownership of goods and services from one person or entity to another. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and...

 agreement
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...

s with other countries or international
International
----International mostly means something that involves more than one country. The term international as a word means involvement of, interaction between or encompassing more than one nation, or generally beyond national boundaries...

 entities; Administrative/commercial product lists; Final adaptation system for Mercosur customs unification; Origin system; Free-trade zone system, special customs areas and export processing zones; System to discourage unfair trade practices; Elimination and harmonization of tariff
Tariff
A tariff may be either tax on imports or exports , or a list or schedule of prices for such things as rail service, bus routes, and electrical usage ....

 restriction
Regulation
Regulation is administrative legislation that constitutes or constrains rights and allocates responsibilities. It can be distinguished from primary legislation on the one hand and judge-made law on the other...

s; Nonmember country safeguard systems; Customs coordination and harmonization; Consumer protection
Consumer protection
Consumer protection laws designed to ensure fair trade competition and the free flow of truthful information in the marketplace. The laws are designed to prevent businesses that engage in fraud or specified unfair practices from gaining an advantage over competitors and may provide additional...

 systems; and Export incentive harmonization.

Furthermore, the trade commission should speak out regarding the issues raised by the member states regarding application and compliance with common offshore tariffs and other common trade policy instruments. The commission shall meet at least once a month, as well as whenever asked to by the Mercosur executive
Executive (government)
Executive branch of Government is the part of government that has sole authority and responsibility for the daily administration of the state bureaucracy. The division of power into separate branches of government is central to the idea of the separation of powers.In many countries, the term...

 agency
Agency (law)
The law of agency is an area of commercial law dealing with a contractual or quasi-contractual, or non-contractual set of relationships when a person, called the agent, is authorized to act on behalf of another to create a legal relationship with a third party...

 or by a member state. The commission can take decisions entailing administration and application of trade policies adopted under Southern Common Market, and whenever necessary submit proposals to the executive body regarding regulation of the areas under its authority; additionally, it can propose new guidelines or modify those in existence in Mercosur trade and customs matters. In this respect, the trade commission can propose a change in the import duty on specific items under common external tariffs, including cases referring to development of new Mercosur production activities. In order to better achieve its objectives, the trade commission can create technical
Technical analysis
In finance, technical analysis is security analysis discipline for forecasting the direction of prices through the study of past market data, primarily price and volume. Behavioral economics and quantitative analysis incorporate technical analysis, which being an aspect of active management stands...

 committees targeting direction and supervision of the work it engages in. It can also adopt internal operating regulations. Proposals and decisions of the trade commission will be taken by a consensus of the representatives indicated by each member nation. Any disputes ensuing from the application, interpretation or compliance with the act
Acting (law)
In law, when someone is said to be acting in a position it can mean one of three things.*The position has not yet been formally created.*The person is only occupying the position temporarily, to ensure continuity.*The person does not have a mandate....

s issued by the trade commission are to be referred to the Mercosur executive body, and should be resolved using the directives set forth in the Dispute Resolution
Resolution (law)
A resolution is a written motion adopted by a deliberative body. The substance of the resolution can be anything that can normally be proposed as a motion. For long or important motions, though, it is often better to have them written out so that discussion is easier or so that it can be...

 System adopted under Southern Common Market.

International jurisdiction over contractual matters

The rules on litigation jurisdiction
Jurisdiction
Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility...

 over contractual matters will apply to disputes arising from civil
Civil law (common law)
Civil law, as opposed to criminal law, is the branch of law dealing with disputes between individuals or organizations, in which compensation may be awarded to the victim...

 or commercial
Commerce
While business refers to the value-creating activities of an organization for profit, commerce means the whole system of an economy that constitutes an environment for business. The system includes legal, economic, political, social, cultural, and technological systems that are in operation in any...

 international
International
----International mostly means something that involves more than one country. The term international as a word means involvement of, interaction between or encompassing more than one nation, or generally beyond national boundaries...

 contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...

s between private-law legal entities or individuals provided that: They are domiciled or headquartered in different member states: At least one of the parties to the contract is domiciled or headquartered in any member state and, additionally, has made a choice of jurisdiction in favor of a court in one of the member states. In this case, there must be a reasonable connection between the jurisdiction chosen and the controversy. The scope of the application of the international
International
----International mostly means something that involves more than one country. The term international as a word means involvement of, interaction between or encompassing more than one nation, or generally beyond national boundaries...

 jurisdiction
Jurisdiction
Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility...

 guidelines over contractual matters excludes the following: Legal relationships between bankrupt entities/individual
Individual
An individual is a person or any specific object or thing in a collection. Individuality is the state or quality of being an individual; a person separate from other persons and possessing his or her own needs, goals, and desires. Being self expressive...

s and their creditors and any other analogous proceedings (especially concordatas composition with creditors); Matters under agreements involving family
Family
In human context, a family is a group of people affiliated by consanguinity, affinity, or co-residence. In most societies it is the principal institution for the socialization of children...

 and succession law; Social security
Social security
Social security is primarily a social insurance program providing social protection or protection against socially recognized conditions, including poverty, old age, disability, unemployment and others. Social security may refer to:...

 contracts; Administrative contracts; Employment
Employment
Employment is a contract between two parties, one being the employer and the other being the employee. An employee may be defined as:- Employee :...

 contracts; Consumer
Consumer
Consumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary.-Economics and marketing:...

 sales
Sales
A sale is the act of selling a product or service in return for money or other compensation. It is an act of completion of a commercial activity....

 contracts; Transport
Transport
Transport or transportation is the movement of people, cattle, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline, and space. The field can be divided into infrastructure, vehicles, and operations...

 contracts; Insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...

 policies; and Rights
Rights
Rights are legal, social, or ethical principles of freedom or entitlement; that is, rights are the fundamental normative rules about what is allowed of people or owed to people, according to some legal system, social convention, or ethical theory...

 in rem.

Choice of Jurisdiction

Court
Court
A court is a form of tribunal, often a governmental institution, with the authority to adjudicate legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters in accordance with the rule of law...

s in member nations to whose jurisdiction the contracted parties have agreed to submit the matter in writing will have jurisdiction
Jurisdiction
Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility...

 to settle controversies stemming from civil or commercial international contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...

s.

Agreement of choice

The jurisdiction can be agreed on at the time the contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...

 is signed, during the life of the contract, or even when the dispute actually arises. The validity and effects of the choice of venue will be governed by the law
Law
Law is a system of rules and guidelines which are enforced through social institutions to govern behavior, wherever possible. It shapes politics, economics and society in numerous ways and serves as a social mediator of relations between people. Contract law regulates everything from buying a bus...

 of the member nation
Nation
A nation may refer to a community of people who share a common language, culture, ethnicity, descent, and/or history. In this definition, a nation has no physical borders. However, it can also refer to people who share a common territory and government irrespective of their ethnic make-up...

s that normally have jurisdiction to hear the case, always resorting to the law most favorable to the validity of the contract. Whether or not jurisdiction is chosen, such jurisdiction will be prorogated in favor of the courts of the member state where the proceedings are in fact filed, provided the respondent voluntarily allows this in an affirmative and unfeigned way.

Subsidiary jurisdiction

Should the contracted parties not reach an agreement regarding the court
Court
A court is a form of tribunal, often a governmental institution, with the authority to adjudicate legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters in accordance with the rule of law...

s competent
Jurisdiction
Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility...

 to settle disputes, the member state chosen by the plaintiff of the case in point will have jurisdiction: The court of the place where the contract is to be performed; or The court of the domicile of the respondent; or The court of the domicile
Domicile (law)
In law, domicile is the status or attribution of being a permanent resident in a particular jurisdiction. A person can remain domiciled in a jurisdiction even after they have left it, if they have maintained sufficient links with that jurisdiction or have not displayed an intention to leave...

 or headquarters of the claimant when the latter can show that it has done its part. For purposes of item (i) above the place of performance of the contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...

 will be the member state where the obligation
Obligation
An obligation is a requirement to take some course of action, whether legal or moral. There are also obligations in other normative contexts, such as obligations of etiquette, social obligations, and possibly...

s on which the claim is based have been or should be performed, taking into consideration the following: For contracts involving certain specific items, the place where they existed at the time of contract signing; For contracts involving specific items according to their type, the place of domicile of the debtor at the time of contract signing; For contracts involving fungible items, the place of domicile of the debtor
Debtor
A debtor is an entity that owes a debt to someone else. The entity may be an individual, a firm, a government, a company or other legal person. The counterparty is called a creditor...

 at the time of conclusion of the contract; and For service rendering contracts:
  • If in regard to items, the place where they were at the time
    Time
    Time is a part of the measuring system used to sequence events, to compare the durations of events and the intervals between them, and to quantify rates of change such as the motions of objects....

     of contract
    Contract
    A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...

     signing;

  • If effectiveness is related to any special place, the place where they were to produce effects;

  • In all other case
    Legal case
    A legal case is a dispute between opposing parties resolved by a court, or by some equivalent legal process. A legal case may be either civil or criminal...

    s, the place of domicile of the debtor at the time of contract signing. For purposes of application of second item above for determination of the domicile of the respondent in a contractual dispute involving individuals, the following will be taken into consideration: The habitual residence: On a subsidiary basis, the central place of business
    Business
    A business is an organization engaged in the trade of goods, services, or both to consumers. Businesses are predominant in capitalist economies, where most of them are privately owned and administered to earn profit to increase the wealth of their owners. Businesses may also be not-for-profit...

    ; and In the absence of any such consideration
    Consideration
    Consideration is the central concept in the common law of contracts and is required, in most cases, for a contract to be enforceable. Consideration is the price one pays for another's promise. It can take a number of forms: money, property, a promise, the doing of an act, or even refraining from...

    s, the place where found, meaning the actual residence. When dealing with a legal entity, the determination of the domicile
    Domicile (law)
    In law, domicile is the status or attribution of being a permanent resident in a particular jurisdiction. A person can remain domiciled in a jurisdiction even after they have left it, if they have maintained sufficient links with that jurisdiction or have not displayed an intention to leave...

     will be based on where the administrative headquarters have been set up. The claim plaintiff can, as an alternative, file in any of the places where the legal entity has branches, establishments, agencies or any other type of representation. Legal entities
    Incorporation (business)
    Incorporation is the forming of a new corporation . The corporation may be a business, a non-profit organisation, sports club, or a government of a new city or town...

     headquartered in any member state that have concluded contracts with any other member state can be sued in the courts of this latter state should there be any dispute as to the construction
    Construction
    In the fields of architecture and civil engineering, construction is a process that consists of the building or assembling of infrastructure. Far from being a single activity, large scale construction is a feat of human multitasking...

     and implementation of the obligations regulated by contract. In the event there is a codefendant, a suit on contractual matters can be adjudicated with the courts of jurisdiction in the territory of the domicile of any of the parties to the litigation. Additionally, any claims entailing personal collateral
    Collateral contract
    A collateral contract is a contract where the consideration is the entry into another contract, and co-exists side by side with the main contract. For example, a collateral contract is formed when one party pays the other party a certain sum for entry into another contract...

     rights
    Rights
    Rights are legal, social, or ethical principles of freedom or entitlement; that is, rights are the fundamental normative rules about what is allowed of people or owed to people, according to some legal system, social convention, or ethical theory...

     or intervention of nonmember states in contractual obligations can be filed with the court hearing the main proceeding.

Counterclaims

In the event of there being a counterclaim based on any act or fact that served as the basis for the main proceeding, the courts hearing the main proceeding will be competent to hear any counterclaim
Counterclaim
In civil procedure, a party's claim is a counterclaim if the defending party has previously made a claim against the claiming party.Examples of counterclaims include:...

s that may arise.

Immigration

According to Brazilian Labour Department, between 2005 and July, 2009 immigrants to Brazil consisted of: 3,083 Argentines, 1,303 Venezuelans, 1,168 Chileans, 476 Bolivians
Demographics of Bolivia
This article is about the demographic features of the population of Bolivia, including population density, ethnicity, education level, health of the populace, economic status, religious affiliations and other aspects of the population....

, 314 Uruguayans, 159 Paraguayans.

Educational integration

Based on the premise that education
Education
Education in its broadest, general sense is the means through which the aims and habits of a group of people lives on from one generation to the next. Generally, it occurs through any experience that has a formative effect on the way one thinks, feels, or acts...

 is a fundamental
Fundamentalism
Fundamentalism is strict adherence to specific theological doctrines usually understood as a reaction against Modernist theology. The term "fundamentalism" was originally coined by its supporters to describe a specific package of theological beliefs that developed into a movement within the...

 factor in the regional integration
Regional integration
Regional integration is a process in which states enter into a regional agreement in order to enhance regional cooperation through regional institutions and rules...

 process, educational courses at the primary or junior high level, provided that they do not entail technical studies, will be recognized by member states
Sovereign state
A sovereign state, or simply, state, is a state with a defined territory on which it exercises internal and external sovereignty, a permanent population, a government, and the capacity to enter into relations with other sovereign states. It is also normally understood to be a state which is neither...

 as being on the same level for all member nations. Likewise, in order to permit continuing education, certificates proving course
Course (education)
The very broad dictionary meaning of the word course is the act or action of moving in a path from point to point . There are multiple meanings for this word, some of which include: general line of orientation, a mode of action, part of a meal, a mode of action, and many more. This article focuses...

 conclusion
Academia
Academia is the community of students and scholars engaged in higher education and research.-Etymology:The word comes from the akademeia in ancient Greece. Outside the city walls of Athens, the gymnasium was made famous by Plato as a center of learning...

 issued by an official institution accredited in one of the member states will be valid
Validity
In logic, argument is valid if and only if its conclusion is entailed by its premises, a formula is valid if and only if it is true under every interpretation, and an argument form is valid if and only if every argument of that logical form is valid....

 in all other member states. Nontechnical primary and junior high level studies that have not been completed will be accredited by any member state, thereby allowing course conclusion in another member nation. Studies will be completed using an equivalency table to determine the level achieved.

Regional Technical Commission

In order to harmonize the mechanisms favoring accreditation of studies undertaken in any member nation in any other member nation, and to resolve any situations that may not be covered by the equivalency table, a Regional Technical Commission will be created. This Commission will include delegation
Delegation
Delegation is the assignment of authority and responsibility to another person to carry out specific activities. However the person who delegated the work remains accountable for the outcome of the delegated work. Delegation empowers a subordinate to make decisions, i.e...

s from the ministries
Ministry (government department)
A ministry is a specialised organisation responsible for a sector of government public administration, sometimes led by a minister or a senior public servant, that can have responsibility for one or more departments, agencies, bureaus, commissions or other smaller executive, advisory, managerial or...

 of education
Education
Education in its broadest, general sense is the means through which the aims and habits of a group of people lives on from one generation to the next. Generally, it occurs through any experience that has a formative effect on the way one thinks, feels, or acts...

 of each member nation, and will meet whenever at least two member states think it necessary to convene. The meeting sites will be established on a rotating basis. Any disputes that arise among the member states as a result of application, construction or noncompliance regarding the provisions related to education will be initially resolved by direct diplomatic negotiation
Negotiation
Negotiation is a dialogue between two or more people or parties, intended to reach an understanding, resolve point of difference, or gain advantage in outcome of dialogue, to produce an agreement upon courses of action, to bargain for individual or collective advantage, to craft outcomes to satisfy...

s. Should the countries not reach an accord or should the dispute be only partially resolved, then the procedures set forth in the Dispute Resolution
Dispute resolution
Dispute resolution is the process of resolving disputes between parties.-Methods:Methods of dispute resolution include:* lawsuits * arbitration* collaborative law* mediation* conciliation* many types of negotiation* facilitation...

 System will be resorted to. Should the member nations enter into a bilateral convention or accord whose provisions are more favorable to their students, the member states in question can apply whichever provisions they consider most advantageous.

Free Trade Zones

The member nations can have commercial
Commerce
While business refers to the value-creating activities of an organization for profit, commerce means the whole system of an economy that constitutes an environment for business. The system includes legal, economic, political, social, cultural, and technological systems that are in operation in any...

 free-trade zones, industrial
Industry
Industry refers to the production of an economic good or service within an economy.-Industrial sectors:There are four key industrial economic sectors: the primary sector, largely raw material extraction industries such as mining and farming; the secondary sector, involving refining, construction,...

 free-trade zones, export
Export
The term export is derived from the conceptual meaning as to ship the goods and services out of the port of a country. The seller of such goods and services is referred to as an "exporter" who is based in the country of export whereas the overseas based buyer is referred to as an "importer"...

 processing zones, and special customs areas, all of which target providing merchandise marketed or produced in these areas with treatment different from that afforded in their respective customs territories.

Tariffs

The member states
Sovereign state
A sovereign state, or simply, state, is a state with a defined territory on which it exercises internal and external sovereignty, a permanent population, a government, and the capacity to enter into relations with other sovereign states. It is also normally understood to be a state which is neither...

 can assess merchandise from these areas with the common external tariff
Tariff
A tariff may be either tax on imports or exports , or a list or schedule of prices for such things as rail service, bus routes, and electrical usage ....

 used for Mercosur merchandise, or, in the case of certain special product
Product (business)
In general, the product is defined as a "thing produced by labor or effort" or the "result of an act or a process", and stems from the verb produce, from the Latin prōdūce ' lead or bring forth'. Since 1575, the word "product" has referred to anything produced...

s, the domestic tariff prevailing in each individual state. In this way, the products from the free-trade zones can have the more favorable tax
Tax
To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...

 treatment established under Southern Common Market, given to the merchandise produced in the normal customs
Customs
Customs is an authority or agency in a country responsible for collecting and safeguarding customs duties and for controlling the flow of goods including animals, transports, personal effects and hazardous items in and out of a country...

 zones of each member state or, in the case of certain special products, can have the normal customs treatment prevailing in each nation
Nation
A nation may refer to a community of people who share a common language, culture, ethnicity, descent, and/or history. In this definition, a nation has no physical borders. However, it can also refer to people who share a common territory and government irrespective of their ethnic make-up...

.

Safeguards

Product
Product (business)
In general, the product is defined as a "thing produced by labor or effort" or the "result of an act or a process", and stems from the verb produce, from the Latin prōdūce ' lead or bring forth'. Since 1575, the word "product" has referred to anything produced...

s produced or marketed in the free-trade zones of each member nation will be eligible for the safeguard system whenever this entails an increase not provided for in import
Import
The term import is derived from the conceptual meaning as to bring in the goods and services into the port of a country. The buyer of such goods and services is referred to an "importer" who is based in the country of import whereas the overseas based seller is referred to as an "exporter". Thus...

s, but capable of causing damages or threatened damages to the importer country.

Incentives

In the event of the producing nation's granting special incentive
Incentive
In economics and sociology, an incentive is any factor that enables or motivates a particular course of action, or counts as a reason for preferring one choice to the alternatives. It is an expectation that encourages people to behave in a certain way...

s for production from the free-trade zones that are not compatible with the corresponding guidelines established under the General Agreement on Tariffs and Trade
General Agreement on Tariffs and Trade
The General Agreement on Tariffs and Trade was negotiated during the UN Conference on Trade and Employment and was the outcome of the failure of negotiating governments to create the International Trade Organization . GATT was signed in 1947 and lasted until 1993, when it was replaced by the World...

 (GATT), the member nation can make any adjustments needed to return the situation to equilibrium.

Creation

The member nations agreed that any free-trade zones that in August 1994 were already in operation could operate normally under Mercosur, along with any that are set up in light of legal guideline
Guideline
A guideline is a statement by which to determine a course of action. A guideline aims to streamline particular processes according to a set routine or sound practice. By definition, following a guideline is never mandatory. Guidelines are not binding and are not enforced. A guideline is a statement...

s prevailing or in course in Congress
Congress
A congress is a formal meeting of the representatives of different nations, constituent states, independent organizations , or groups....

 during this same time period. This means that a member nation can no longer create new free-trade zones that are more privileged.

Manaus and Tierra del Fuego FTZs

The actual implementation of Mercosur will not affect the special Manaus
Manaus
Manaus is a city in Brazil, the capital of the state of Amazonas. It is situated at the confluence of the Negro and Solimões rivers. It is the most populous city of Amazonas, according to the statistics of Brazilian Institute of Geography and Statistics, and is a popular ecotourist destination....

, Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...

, and Tierra del Fuego
Tierra del Fuego
Tierra del Fuego is an archipelago off the southernmost tip of the South American mainland, across the Strait of Magellan. The archipelago consists of a main island Isla Grande de Tierra del Fuego divided between Chile and Argentina with an area of , and a group of smaller islands including Cape...

, Argentina
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...

, free-trade zones organized in light of their special geographic situations. These two free-trade zones may continue normal operations until 2013.

Reciprocal promotion and protection

The nation
Nation
A nation may refer to a community of people who share a common language, culture, ethnicity, descent, and/or history. In this definition, a nation has no physical borders. However, it can also refer to people who share a common territory and government irrespective of their ethnic make-up...

s subscribing to the Asunción Treaty
Treaty of Asunción
The Treaty of Asunción was a treaty between the countries of Argentina, Brazil, Paraguay, and Uruguay signed on March 26, 1991. The objective of the treaty, signed in Asunción, was to establish a common market among the participating countries, popularly called Mercosur...

 consider that the creation and maintenance of conditions favorable to individual
Individual
An individual is a person or any specific object or thing in a collection. Individuality is the state or quality of being an individual; a person separate from other persons and possessing his or her own needs, goals, and desires. Being self expressive...

 or corporate investment
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...

s for the jurisdiction of one of the member states
Sovereign state
A sovereign state, or simply, state, is a state with a defined territory on which it exercises internal and external sovereignty, a permanent population, a government, and the capacity to enter into relations with other sovereign states. It is also normally understood to be a state which is neither...

 in the territory of another state is essential to intensify the economic cooperation
Cooperation
Cooperation or co-operation is the process of working or acting together. In its simplest form it involves things working in harmony, side by side, while in its more complicated forms, it can involve something as complex as the inner workings of a human being or even the social patterns of a...

 targeted so as to accelerate the integration process among all four member states. In this context, Argentina
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...

, Uruguay
Uruguay
Uruguay ,officially the Oriental Republic of Uruguay,sometimes the Eastern Republic of Uruguay; ) is a country in the southeastern part of South America. It is home to some 3.5 million people, of whom 1.8 million live in the capital Montevideo and its metropolitan area...

, Paraguay
Paraguay
Paraguay , officially the Republic of Paraguay , is a landlocked country in South America. It is bordered by Argentina to the south and southwest, Brazil to the east and northeast, and Bolivia to the northwest. Paraguay lies on both banks of the Paraguay River, which runs through the center of the...

 and Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...

 signed on January 1, 1994 in the city of Colonia del Sacramento
Colonia del Sacramento
Colonia del Sacramento is a city in southwestern Uruguay, by the Río de la Plata, facing Buenos Aires, Argentina. It is the oldest town in Uruguay and capital of the departamento of Colonia. It has a population of around 22,000.It is renowned for its historic quarter, a World Heritage Site...

, Uruguay
Uruguay
Uruguay ,officially the Oriental Republic of Uruguay,sometimes the Eastern Republic of Uruguay; ) is a country in the southeastern part of South America. It is home to some 3.5 million people, of whom 1.8 million live in the capital Montevideo and its metropolitan area...

, the Colonia Protocol for the Reciprocal Promotion and Protection of Mercosur Investments (Colonia Protocol). It was established in this protocol that investments under Mercosur by investor
Investor
An investor is a party that makes an investment into one or more categories of assets --- equity, debt securities, real estate, currency, commodity, derivatives such as put and call options, etc...

s resident or domicile
Domicile (law)
In law, domicile is the status or attribution of being a permanent resident in a particular jurisdiction. A person can remain domiciled in a jurisdiction even after they have left it, if they have maintained sufficient links with that jurisdiction or have not displayed an intention to leave...

d in the territory of any member state will be entitled to treatment no less favorable than that accorded by the other member state to national investors or nonmember states.

Investors

For purposes of construction
Construction
In the fields of architecture and civil engineering, construction is a process that consists of the building or assembling of infrastructure. Far from being a single activity, large scale construction is a feat of human multitasking...

 of the Colonia Protocol
Protocol (diplomacy)
In international politics, protocol is the etiquette of diplomacy and affairs of state.A protocol is a rule which guides how an activity should be performed, especially in the field of diplomacy. In diplomatic services and governmental fields of endeavor protocols are often unwritten guidelines...

, investors are considered to be: Individual
Individual
An individual is a person or any specific object or thing in a collection. Individuality is the state or quality of being an individual; a person separate from other persons and possessing his or her own needs, goals, and desires. Being self expressive...

s that are citizens of any of the member nations or that reside there on a permanent basis or are domiciled there, with due regard for legislation prevailing in such territory; Legal entities organized pursuant to the legislation
Legislation
Legislation is law which has been promulgated by a legislature or other governing body, or the process of making it...

 of one of the member nations that are headquartered there; and Legal entities organized in the territory where the investment is made, actually and directly or indirectly controlled by the legal entities or individuals mentioned above.

Investments

The term investment
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...

 includes all types of assets such as: movable or immovable property
Property
Property is any physical or intangible entity that is owned by a person or jointly by a group of people or a legal entity like a corporation...

, such as rights
Rights
Rights are legal, social, or ethical principles of freedom or entitlement; that is, rights are the fundamental normative rules about what is allowed of people or owed to people, according to some legal system, social convention, or ethical theory...

 in rem and guarantee in rem rights; Share
Share (finance)
A joint stock company divides its capital into units of equal denomination. Each unit is called a share. These units are offered for sale to raise capital. This is termed as issuing shares. A person who buys share/shares of the company is called a shareholder, and by acquiring share or shares in...

s, corporate holdings and any other type of corporate participations; Credit
Credit (finance)
Credit is the trust which allows one party to provide resources to another party where that second party does not reimburse the first party immediately , but instead arranges either to repay or return those resources at a later date. The resources provided may be financial Credit is the trust...

 instruments and rights that may have an economic value; Intellectual property rights or materials, Including copyrights and industrial property rights such as patents, industrial drawings, trademarks, commercial names, technical procedures, know-how and goodwill; Economic concessions involving public law
Public law
Public law is a theory of law governing the relationship between individuals and the state. Under this theory, constitutional law, administrative law and criminal law are sub-divisions of public law...

, such as research, cultivation, extraction or natural resource exploration concessions.

Freedom to invest

The nation
Nation
A nation may refer to a community of people who share a common language, culture, ethnicity, descent, and/or history. In this definition, a nation has no physical borders. However, it can also refer to people who share a common territory and government irrespective of their ethnic make-up...

 receiving the investment
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...

 cannot avail itself of unjustified or discriminatory means capable of restricting the investor's freedom to manage, maintain, use, enjoy and dispose of its investments.

Tax Issues

The member states are not however obligated to extend to investors in the other nations signatory to the Colonia Protocol the benefit
Cost-benefit analysis
Cost–benefit analysis , sometimes called benefit–cost analysis , is a systematic process for calculating and comparing benefits and costs of a project for two purposes: to determine if it is a sound investment , to see how it compares with alternate projects...

s of any treatment, preference or privilege
Privilege
A privilege is a special entitlement to immunity granted by the state or another authority to a restricted group, either by birth or on a conditional basis. It can be revoked in certain circumstances. In modern democratic states, a privilege is conditional and granted only after birth...

 resulting from international
International
----International mostly means something that involves more than one country. The term international as a word means involvement of, interaction between or encompassing more than one nation, or generally beyond national boundaries...

 accord
Accord (coalition)
The Accord Coalition is a campaign coalition, launched in 2008, which brings together a wide range of member organisations, both religious and non-religious, that are concerned that legislation around admissions, employment and the curriculum in state funded faith schools in England and Wales can...

s relating fully or partially to tax matters.

Exceptions

In addition, the member nations can temporarily establish a list of exceptions where the new treatment will not yet prevail. In this way, the various member nations decided to except the following economic sectors: Argentina
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...

: ownership of real estate on the frontier
Frontier
A frontier is a political and geographical term referring to areas near or beyond a boundary. 'Frontier' was absorbed into English from French in the 15th century, with the meaning "borderland"--the region of a country that fronts on another country .The use of "frontier" to mean "a region at the...

 strip, air transportation, naval industry, nuclear
Nuclear power
Nuclear power is the use of sustained nuclear fission to generate heat and electricity. Nuclear power plants provide about 6% of the world's energy and 13–14% of the world's electricity, with the U.S., France, and Japan together accounting for about 50% of nuclear generated electricity...

 plant
Plant
Plants are living organisms belonging to the kingdom Plantae. Precise definitions of the kingdom vary, but as the term is used here, plants include familiar organisms such as trees, flowers, herbs, bushes, grasses, vines, ferns, mosses, and green algae. The group is also called green plants or...

s, uranium mining, insurance and fishery; Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...

: mineral prospection and mining; use of hydraulic energy; health
Health
Health is the level of functional or metabolic efficiency of a living being. In humans, it is the general condition of a person's mind, body and spirit, usually meaning to be free from illness, injury or pain...

 care; television and radio broadcasting and telecommunications in general, acquisition or leasing of rural properties; participation in the financial
FINANCIAL
FINANCIAL is the weekly English-language newspaper with offices in Tbilisi, Georgia and Kiev, Ukraine. Published by Intelligence Group LLC, FINANCIAL is focused on opinion leaders and top business decision-makers; It's about world’s largest companies, investing, careers, and small business. It is...

 intermediation
Intermediation
Intermediation involves the "matching" of lenders with savings to borrowers who need money by an agent or third party, such as a bank.If this matching is successful, the lender obtains a positive rate of return, the borrower receives a return for risk taking and entrepreneurship and the banker...

, insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...

, social security
Social security
Social security is primarily a social insurance program providing social protection or protection against socially recognized conditions, including poverty, old age, disability, unemployment and others. Social security may refer to:...

 and capitalization
Capitalization
Capitalization is writing a word with its first letter as a majuscule and the remaining letters in minuscules . This of course only applies to those writing systems which have a case distinction...

 systems; chartering and cabotage as well as inland navigation; Paraguay
Paraguay
Paraguay , officially the Republic of Paraguay , is a landlocked country in South America. It is bordered by Argentina to the south and southwest, Brazil to the east and northeast, and Bolivia to the northwest. Paraguay lies on both banks of the Paraguay River, which runs through the center of the...

: ownership of real property
Property
Property is any physical or intangible entity that is owned by a person or jointly by a group of people or a legal entity like a corporation...

 on the frontier
Frontier
A frontier is a political and geographical term referring to areas near or beyond a boundary. 'Frontier' was absorbed into English from French in the 15th century, with the meaning "borderland"--the region of a country that fronts on another country .The use of "frontier" to mean "a region at the...

 strip; communications, including radio and television broadcasting; air, sea and land transportation; electricity, water
Water
Water is a chemical substance with the chemical formula H2O. A water molecule contains one oxygen and two hydrogen atoms connected by covalent bonds. Water is a liquid at ambient conditions, but it often co-exists on Earth with its solid state, ice, and gaseous state . Water also exists in a...

 and telephone
Telephone
The telephone , colloquially referred to as a phone, is a telecommunications device that transmits and receives sounds, usually the human voice. Telephones are a point-to-point communication system whose most basic function is to allow two people separated by large distances to talk to each other...

 services; prospecting for hydrocarbons and strategic minerals; import and refining of petroleum derivates and postal services; and Uruguay
Uruguay
Uruguay ,officially the Oriental Republic of Uruguay,sometimes the Eastern Republic of Uruguay; ) is a country in the southeastern part of South America. It is home to some 3.5 million people, of whom 1.8 million live in the capital Montevideo and its metropolitan area...

: electricity
Electricity
Electricity is a general term encompassing a variety of phenomena resulting from the presence and flow of electric charge. These include many easily recognizable phenomena, such as lightning, static electricity, and the flow of electrical current in an electrical wire...

; hydrocarbons; basic petrochemicals, atomic energy; prospecting for strategic minerals; financial intermediation; railways, telecommunications; radio
Radio
Radio is the transmission of signals through free space by modulation of electromagnetic waves with frequencies below those of visible light. Electromagnetic radiation travels by means of oscillating electromagnetic fields that pass through the air and the vacuum of space...

 broadcasting; press
Journalism
Journalism is the practice of investigation and reporting of events, issues and trends to a broad audience in a timely fashion. Though there are many variations of journalism, the ideal is to inform the intended audience. Along with covering organizations and institutions such as government and...

 and audiovisual means.

Expropriation and compensation

The member nations undertook to do nothing to nationalize or expropriate investment
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...

s in their territories that pertain to investors from the signatory countries, unless such measures are taken based on public need. In such case, nothing discriminatory can be done, but everything must be implemented by due legal process. Compensation for the investment holder that is expropriated or nationalized should be both adequate and effective, and made in advance, based on the real investment
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...

 value
Value (economics)
An economic value is the worth of a good or service as determined by the market.The economic value of a good or service has puzzled economists since the beginning of the discipline. First, economists tried to estimate the value of a good to an individual alone, and extend that definition to goods...

 determined at the time the decision is publicly announced by the proper authorities. This payment
Payment
A payment is the transfer of wealth from one party to another. A payment is usually made in exchange for the provision of goods, services or both, or to fulfill a legal obligation....

 will be updated until actual payment, and the affected investor will receive interest.

Transfers

The original member state
Sovereign state
A sovereign state, or simply, state, is a state with a defined territory on which it exercises internal and external sovereignty, a permanent population, a government, and the capacity to enter into relations with other sovereign states. It is also normally understood to be a state which is neither...

 investor
Investor
An investor is a party that makes an investment into one or more categories of assets --- equity, debt securities, real estate, currency, commodity, derivatives such as put and call options, etc...

s will be ensured free transfer
Money transfer
Money transfer generally refers to one of the following cashless modes of payment or payment systems:*Wire transfer, an international expedited bank-to-bank funds transfer*Electronic funds transfer, an umbrella term mostly used for bank card-based payments...

 of their investments and any earnings thereon. These transfers can be made in freely convertible currency
Currency
In economics, currency refers to a generally accepted medium of exchange. These are usually the coins and banknotes of a particular government, which comprise the physical aspects of a nation's money supply...

, using the exchange rate
Exchange rate
In finance, an exchange rate between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency...

 prevailing on the market
Market
A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers...

 pursuant to the procedures established by the member state receiving the investment. Member nations cannot adopt any exchange measures restricting free transfer of the funds invested or from activities exercised in their respective territories.

Role and potential

Some South Americans see Mercosur as giving the capability to combine resources to balance the activities of other global economic powers, especially the North American Free Trade Agreement
North American Free Trade Agreement
The North American Free Trade Agreement or NAFTA is an agreement signed by the governments of Canada, Mexico, and the United States, creating a trilateral trade bloc in North America. The agreement came into force on January 1, 1994. It superseded the Canada – United States Free Trade Agreement...

 (NAFTA) and the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...

. The organization could also potentially pre-empt the Free Trade Area of the Americas
Free Trade Area of the Americas
The Free Trade Area of the Americas , , ) was a proposed agreement to eliminate or reduce the trade barriers among all countries in the Americas but Cuba. In the last round of negotiations, trade ministers from 34 countries met in Miami, United States, in November 2003 to discuss the proposal...

 (FTAA); however, over half of the current Mercosur member countries rejected the FTAA proposal at the IV Cumbre de las Américas (IV Summit of the Americas) in Argentina in 2005.

The development of Mercosur was arguably weakened by the collapse of the Argentine economy in 2001 and it has still seen internal conflicts over trade policy, between Brazil and Argentina, Argentina and Uruguay, Paraguay and Brazil, etc. In addition, many obstacle
Obstacle
An obstacle is an object, thing, action or situation that causes an obstruction. There are, therefore, different types of obstacles, which can be physical, economic, biopsychosocial, cultural, political, technological or even military.-Physical barriers:As physical obstacles, we can enumerate all...

s are to be addressed before the development of a common currency in Mercosur.

In 2004, Mercosur signed a cooperation agreement with the Andean Community of Nations
Andean Community of Nations
The Andean Community is a customs union comprising the South American countries of Bolivia, Colombia, Ecuador and Peru. The trade bloc was called the Andean Pact until 1996 and came into existence with the signing of the Cartagena Agreement in 1969...

 trade bloc (CAN) and they published a joint letter of intent for future negotiations towards integrating all of South America
South America
South America is a continent situated in the Western Hemisphere, mostly in the Southern Hemisphere, with a relatively small portion in the Northern Hemisphere. The continent is also considered a subcontinent of the Americas. It is bordered on the west by the Pacific Ocean and on the north and east...

. The prospect of increased political integration within the organization, as per the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...

 and advocated by some, is still uncertain. Bolivia, also a member of CAN and an associate member of Mercosur before the UNASUR process started, plays a crucial part in relations, says Marion Hörmann, since Bolivia is traditionally seen as a mediator between the Andean countries and the rest of South America. Regional Integration: Key Role for Bolivia

The bloc comprises a population of more than 270 million people, and the combined Gross Domestic Product
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....

 of the full-member nations is in excess of US$3.0 trillion a year (Purchasing power parity
Purchasing power parity
In economics, purchasing power parity is a condition between countries where an amount of money has the same purchasing power in different countries. The prices of the goods between the countries would only reflect the exchange rates...

, PPP) according to International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...

 (IMF) numbers, making Mercosur the fifth-largest economy in the World. It is the fourth-largest trading bloc after the European Union.

The working of Mercosur has not met with universal approval within interested countries. Chile
Chile
Chile ,officially the Republic of Chile , is a country in South America occupying a long, narrow coastal strip between the Andes mountains to the east and the Pacific Ocean to the west. It borders Peru to the north, Bolivia to the northeast, Argentina to the east, and the Drake Passage in the far...

 has to a certain extent preferred to pursue bilateral agreements with trading partners, and there have been calls from Uruguay
Uruguay
Uruguay ,officially the Oriental Republic of Uruguay,sometimes the Eastern Republic of Uruguay; ) is a country in the southeastern part of South America. It is home to some 3.5 million people, of whom 1.8 million live in the capital Montevideo and its metropolitan area...

an politicians for this example to be followed.

FTA with third parties

Recently, with the new cooperation agreement with Mercosur, the Andean Community gained four new associate members: Argentina, Brazil, Paraguay and Uruguay. These four Mercosur members were granted associate membership by the Andean Council of Foreign Ministers meeting in an enlarged session with the Commission (of the Andean Community) on 7 July 2005. This move reciprocates the actions of Mercosur which granted associate membership to all the Andean Community nations by virtue of the Economic Complementarity Agreements (Free Trade Agreements) signed between the CAN and individual Mercosur members.

Colombian president Álvaro Uribe
Álvaro Uribe
Alvaro Uribe Vélez was the 58th President of Colombia, from 2002 to 2010. In August 2010 he was appointed Vice-chairman of the UN panel investigating the Gaza flotilla raid....

 signed a free trade agreement with Mercosur in December 2005, giving Colombian products preferential access to a market of 230 million people. Colombia
Colombia
Colombia, officially the Republic of Colombia , is a unitary constitutional republic comprising thirty-two departments. The country is located in northwestern South America, bordered to the east by Venezuela and Brazil; to the south by Ecuador and Peru; to the north by the Caribbean Sea; to the...

n entrepreneurs will also be able to import materials and capital goods from Mercosur at lower costs due to reduced tariffs resulting from the agreement.

The agreement's asymmetry clauses favor Colombia because it allows the gradual and progressive reduction of tariffs and likewise gives Colombia the opportunity to gradually reform its production system to adapt it to the requirements of the future negotiations within the scheme of Mercosur and the Union of South American Nations. Mercosur signed a free trade agreement with Israel
Israel
The State of Israel is a parliamentary republic located in the Middle East, along the eastern shore of the Mediterranean Sea...

 in Uruguay in December 2007.

Members

The following countries are full members, in the process of becoming full members, associate members or observers.

Full members

 Argentina
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...

 Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...

 Paraguay
Paraguay
Paraguay , officially the Republic of Paraguay , is a landlocked country in South America. It is bordered by Argentina to the south and southwest, Brazil to the east and northeast, and Bolivia to the northwest. Paraguay lies on both banks of the Paraguay River, which runs through the center of the...

 Uruguay
Uruguay
Uruguay ,officially the Oriental Republic of Uruguay,sometimes the Eastern Republic of Uruguay; ) is a country in the southeastern part of South America. It is home to some 3.5 million people, of whom 1.8 million live in the capital Montevideo and its metropolitan area...

 Venezuela
Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...

 (depending on the Congress of Paraguay
Congress of Paraguay
Paraguay's bicameral Congress consists of a 45-member Senate and an80-member Chamber of Deputies. It serves as the legislative branch of the Paraguayan state....

 for admission)


Associate members

 Bolivia
Bolivia
Bolivia officially known as Plurinational State of Bolivia , is a landlocked country in central South America. It is the poorest country in South America...

 Chile
Chile
Chile ,officially the Republic of Chile , is a country in South America occupying a long, narrow coastal strip between the Andes mountains to the east and the Pacific Ocean to the west. It borders Peru to the north, Bolivia to the northeast, Argentina to the east, and the Drake Passage in the far...

 Colombia
Colombia
Colombia, officially the Republic of Colombia , is a unitary constitutional republic comprising thirty-two departments. The country is located in northwestern South America, bordered to the east by Venezuela and Brazil; to the south by Ecuador and Peru; to the north by the Caribbean Sea; to the...

 Ecuador
Ecuador
Ecuador , officially the Republic of Ecuador is a representative democratic republic in South America, bordered by Colombia on the north, Peru on the east and south, and by the Pacific Ocean to the west. It is one of only two countries in South America, along with Chile, that do not have a border...

 Peru
Peru
Peru , officially the Republic of Peru , is a country in western South America. It is bordered on the north by Ecuador and Colombia, on the east by Brazil, on the southeast by Bolivia, on the south by Chile, and on the west by the Pacific Ocean....



Observers

 Mexico
Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...

 New Zealand
New Zealand
New Zealand is an island country in the south-western Pacific Ocean comprising two main landmasses and numerous smaller islands. The country is situated some east of Australia across the Tasman Sea, and roughly south of the Pacific island nations of New Caledonia, Fiji, and Tonga...

 

Intergovernmental Institution for the use of Microalgae Spirulina Against Malnutrition IIMSAM
IIMSAM
The Intergovernmental Institution for the use of Micro‐algae Spirulina Against Malnutrition is an intergovernmental organization based in New York City that has a Permanent Intergovernmental Observer status with the United Nations Economic and Social Council.-Purpose:IIMSAM has been established...


See also

  • Andean Community
  • Union of South American Nations (UNASUR)
  • Bolivarian Alliance for the Americas
  • Central American Common Market
  • Free Trade Area of the Americas
    Free Trade Area of the Americas
    The Free Trade Area of the Americas , , ) was a proposed agreement to eliminate or reduce the trade barriers among all countries in the Americas but Cuba. In the last round of negotiations, trade ministers from 34 countries met in Miami, United States, in November 2003 to discuss the proposal...

  • Customs Union
    Customs union
    A customs union is a type of trade bloc which is composed of a free trade area with a common external tariff. The participant countries set up common external trade policy, but in some cases they use different import quotas...

  • Trade bloc
    Trade bloc
    A trade bloc is a type of intergovernmental agreement, often part of a regional intergovernmental organization, where regional barriers to trade, are reduced or eliminated among the participating states.-Description:...

  • Gaucho (currency)
    Gaucho (currency)
    The Gaucho was the name of a currency intended to be used by Argentina and Brazil in the context of the Argentina-Brazil Integration and Economics Cooperation Program or PICE to make interregional payments...

  • Pedro Bordaberry#Misgivings about Mercosur


Further reading

  • Samuel A. Arieti, The Role of MERCOSUR as a Vehicle for Latin American Integration, Chicago Journal of International Law
    Chicago Journal of International Law
    The Chicago Journal of International Law is a semiannual, student-edited law review published by the University of Chicago Law School since spring 2000. CJIL contains articles covering issues of international law and policy....

    , vol. 6 (2005/2006), pp. 761–773.

External links

The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
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