An analysis of the impact of Argentine membership of Mercosur

Resumen

The Common Market of the Southern Cone (Mercosur) was established between Argentina, Brazil, Uruguay and Paraguay in 1991 and formally came into being in 1995. Since then, significant progress has been made in terms of tariff reductions between the member countries and the establishment of a common external tariff. As a result, notable changes have occurred in the volume, direction and commodity composition of trade flows. This article seeks to examine the impact of Mercosur membership from the Argentine perspective. An analysis is made of the effect of the reorientation of Argentine trade flows towards its Mercosur partners and as a consequence changes in levels of intra-industry trade. The implications for Argentina of the new associate members of Bolivia and Chile and newly concluded trade accords with other regions are discussed. The impact of the institutional structure of Mercosur is also assessed, and issues that are likely to affect the future progress of the integration process and the Argentine viewpoint on these matters are presented in the conclusion.