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Mercosur The Second-Largest Common-Market Agreement In The Americas Is Based On

Mercosur is a major market for EU exports and has so far been Latin America`s only major trading partner with which the EU does not have a preferential trade agreement. EU companies have exported to the four founding countries of Mercosur: some South American heads of state and government have also raised the possibility of political union and said it would be “the most important political development of the decade”. Brazilian Foreign Minister Celso Amorim stressed the importance of creating institutions necessary for South America`s economic integration and continuing to do the same in the future for the social and political integration of the “South American Community”. (60) Heads of state and government expect South American integration to put South American countries in a stronger position in negotiations with the rest of the world, including a possible free trade agreement with the EU and the US Free Trade Area (FTA). Interest in strengthening integration with Latin America was supported by the foreign ministers of the 12 ALADI countries (Argentina, Bolivia, Brazil, Chile, Colombia, Cuba, Ecuador, Mexico, Paraguay, Peru, Uruguay and Venezuela). The first summit of the South American community of nations was held in Brasilia on 30 September 2005. Most heads of state from South American countries attended the summit. Despite venezuelan President Hugo Chavez`s efforts to replace the proposed structure of the CSN with his own proposal, summit representatives decided to advance what their foreign ministers have already developed in preparatory meetings. They supported the idea of a Mercosur-CAN merger to make all of South America a free trade area. One of the outcomes of the summit was to invite the secretariats of all existing integration mechanisms to prepare, by mid-2006, studies on the convergence of trade agreements between South American countries. (61) There are a number of agreements, including free trade agreements, customs union unions, common markets and economic unions.

(1) Free trade agreements are the most common form of regional economic integration, in which members of a group of member states remove tariffs and certain non-tariff barriers between Member States. 2. At the same time, each member maintains its independent trade policy, including its tariffs, with respect to third countries. Free trade agreements are those in which Member States agree to remove tariffs and non-tariff barriers within the free trade area, but each country maintains its own trade policy, including tariffs on foreign trade. ATFs account for 84% of all RTAs in force worldwide, 96% of the remaining ATRs. The likely reason why there are more free trade agreements than customs unions is that they can be concluded more quickly and require less political coordination among members. In a free trade agreement, Member States have their own trade policy vis-à-vis third countries. (3) The U.S.-Chile Free Trade Agreement is an example of a bilateral free trade agreement.

Since the 1990s, Latin American and Caribbean countries have focused on U.S. trade policy, as evidenced by the adoption of the North American Free Trade Agreement (NAFTA), the U.S.-Chile Free Trade Agreement, and, more recently, the Central Republic-Dominican Republic Free Trade Agreement (CAFTA-DR). The Bush administration made trade agreements important elements of U.S. trade policy. The United States is in the process of concluding trade negotiations with Andean countries for a free trade agreement (FTA) and the reactivation of talks on a free trade agreement between the United States and Panama and a U.S. Free Trade Area (FTA).