Why in news?
India and Brazil have been exploring ways to expand their preferential trade agreement. This has renewed interest in MERCOSUR, the South American trade bloc to which Brazil belongs. MERCOSUR is one of the world’s largest common markets and plays a key role in regional integration and international trade negotiations.
Background
MERCOSUR (Mercado Común del Sur or Southern Common Market) was established on 26 March 1991 by the Treaty of Asunción. Four founding members—Argentina, Brazil, Paraguay and Uruguay—agreed to remove customs duties and allow the free movement of goods, services and factors of production. The 1994 Protocol of Ouro Preto gave the bloc a legal personality and turned it into a customs union with a common external tariff. The bloc aims to foster economic development, improve competitiveness and promote democracy in South America.
Membership and structure
- Full members: Argentina, Brazil, Paraguay, Uruguay and Bolivia (the latter completed its accession in 2024). Venezuela joined in 2012 but has been suspended since December 2016 for failing to meet democratic and trade commitments.
- Associate members: Chile, Colombia, Ecuador, Guyana, Peru and Suriname have associate status, allowing them to benefit from tariff preferences without being part of the customs union.
- Headquarters and languages: MERCOSUR’s secretariat is in Montevideo, Uruguay. Official working languages are Spanish and Portuguese. Since 2006 Guarani has also been recognised as a working language.
- Governance: The Common Market Council is the highest decision‑making body and comprises the foreign and economy ministers of member states. Decisions are reached by consensus, and the presidency rotates among members every six months. The Council is supported by the Common Market Group, specialised working groups and the Parliament of MERCOSUR.
India–MERCOSUR relations
India signed a preferential trade agreement (PTA) with MERCOSUR in 2004, providing tariff concessions on a list of goods. Both sides continue to explore deeper cooperation in areas such as agriculture, pharmaceuticals and information technology. An expanded agreement could open a market of more than 280 million people to Indian exporters and help diversify India’s trade beyond traditional partners.
FAQs
- Where is the MERCOSUR secretariat located? In Montevideo, Uruguay.
- Which treaty established MERCOSUR? The Treaty of Asunción, signed in 1991, created the bloc; the 1994 Protocol of Ouro Preto formalised its institutional framework.
- Which countries are full members of MERCOSUR? Argentina, Brazil, Paraguay, Uruguay and Bolivia are full members. Venezuela’s membership is suspended.
- When did Bolivia become a full member? Bolivia’s accession was finalised in 2024 after Brazil’s congress approved the agreement.