7.2.2. Mercosur

1991 agreement in Asuncion (Paraguay) was established common market of the Southern Cone - MERCOSUR, which included Argentina, Brazil, Paraguay and Uruguay (from October 1996 became an associate member grouping Chile, considered the question of accession of Bolivia).

MERCOSUR is to some extent the successor of La Plata group formed in 1969 on the basis of the Agreement La Plata Basin "with Argentina, Brazil, Bolivia, Paraguay and Uruguay. For the purpose of the group defined by the accelerated development and the harmonious integration of the Gulf basin of La Plata and the areas adjacent to it. However, the project was unsuccessful.

МERCOSUR Asuncion 1991 Argentina Brazil Paraguay Uruguay

Creation requires a significant expansion of MERCOSUR integration process in the region. Intehranty States, in particular, agreed:

•  cancellation of any and all customs tariffs and restrictions within the group;

•  establishing a relatively low level of common external customs regime (fragment of a customs union on the principles, norms and rules of the WTO);

•  use of specific measures for political coordination among the participating countries;

•  on the implementation of sectoral agreements on specialization of each country in order to increase competitiveness in the subregional market and markets of "third countries".

Formation of regulatory integration process in MERCOSUR characterized some dynamics. At the beginning of consolidation advantage provided interstate cooperation mechanisms. At first glance, this form of regulation would give the opportunity to avoid "dilution" of the integration process of the super bureaucracy. However, complications increase the coordination of various national agencies of participating countries has caused the institutional functioning of MERCOSUR, and later - even in its modernization.

For 90 years the system was established supranational institutions regulation, which included:

- Council common market;

- Group common market;

- Commission on Trade;

- Technical Secretariat;

- Advisory forums:

a) socio-economic;

b) foreign policy;

- Working Group, technical commissions and committees.

In the process of modernization of this institutional framework have been established:

- Committee of Permanent Representatives as one of the Common Market Council (acting on a permanent basis in Montevideo, provides relations with third countries and international organizations - 2003);

- Permanent Court of Arbitration as a mechanism for resolving trade conflicts - 2004;

- Parliament of MERCOSUR - Institute advisory to the Council common market (the first meeting in 2007).

In general, MERCOSUR regulatory mechanism characterized by researchers as a kind of institutional mix of intergovernmental and supranational structures. In the main part of the decision-making plays a presidential diplomacy, represented by the Common Market Council, the summit is held twice a year.

Integrating cooperation in MERCOSUR, compared with the Andean Community, looks more dynamic and therefore more successful in development and the end results.

On the part of Argentina and Brazil account for 80% of economic potential and trade zone. During the years of integrated development between them deepened cooperation in many areas and especially in industry. Significant cooperation has spread to the level of companies and enterprises. Cooperation in the industry and bilateral trade has developed in parallel. Matching the priorities of economic convergence, structural reforms, especially privatization of state enterprises, the refusal of most customs restrictions, resulting in significant elevation of turnover. Volume of reciprocal deliveries of Argentina and Brazil in 1990-1998, increased from $ 2 to $ 16 billion

Economic complementarity promotes the convergence of the economies in power. In 1993, MERCOSUR Heads of State had approved the document "Main elements of energy policy. This paper deals with energy as a strategic commodity and defined the principle of priority groups of participants with oil and natural gas.

Prospects of economic recovery MERCOSUR regarded as favorable. In late 2000 at a regular meeting between the member countries of integration reached agreement on the coordination of macroeconomic policies. In particular, inflation within MERCOSUR is limited from 2002 to 2005 at 5%, and from 2006 - 4%; debt after 2010 should not exceed 40% of GDP, debt reduction started from 2005; options deficit budget set at 3% of GDP in 2002-2003 - 3,5%.

Uruguay and Paraguay to the trust as growth in exports within MERCOSUR, and the markets of third countries, improving the efficiency of domestic production through increased competition, increased FDI flows to the national economy. On the last position, the "small country" has long been serving the area of allocation and Brazilian Argentinean capital, which amount in some years reaches 2 / 3 the volume of new acquisitions of foreign investment. Through trade with Brazil and Argentina so-called "small country" MERCOSUR markedly diversified structure of its own exports and increased share of new products in it. In addition, Uruguay and Paraguay have used special preferential tariff regime Road until 2006.

MERCOSUR carries out an active foreign policy and foreign economic activity. His strategy aims to implement the principles of "open regionalism". Initiated by Brazil in August 2000 the meeting of heads of 12 South American countries, which reached agreement on a Free Trade Area of South America. There is a search for a new development model that is complemented by specific initiatives. One such initiative was the "Action Plan for the integration of regional infrastructure in South America.

In the 90's came the development of active regional cooperation MERCOSUR with the European Union. On the one hand, MERCOSUR has become important for the EU sub-regional partner in Latin America. On the other - the European Union for MERCOSUR is now the main trading partner and investor. Interregional trade in the 1994-1998 biennium increased by 1,4 times. On the agenda - the creation of inter-regional associations with a view to establishing a free trade and deepening of political cooperation at the intercontinental level.

Made very difficult political and economic relations with MERCOSUR NAFTA. The problem is that party politics in different ways to see the further development of the integration process in the Western Hemisphere. Washington is set to gradually spread trilateral North American Free Trade Agreement on the two continents and thus create a Free Trade Area Americas - Asociasion de Libre Comercio de Americas - ALCA. Brazilian project of ALCA prefers the ultimate goal through comprehensive deepening of subregional integration processes on the principles of "open regionalism", a South American common market and on its  unity at the final stage of NAFTA. This scenario was very realistic and gained practical implementation.

As you know, MERCOSUR is centrifugal and centripetal omitted in integration processes between countries in the region. At the time, Chile and Bolivia became associate membership in MERCOSUR, later joined him to Venezuela. Finally, under the influence of centripetal tendencies in the regional integration process Andean Community and MERCOSUR together in a South American Community of Nations, which in 2008 was renamed the Union of South American nations.

The Union of nations entered the country MERCOSUR - Argentina, Brazil, Paraguay, Uruguay, the country Andes Community of Nations - Bolivia, Chile, Colombia, Peru, Ecuador, countries participating Caribbean Community - Guyana, Suriname and Chile. Economic foundation of the South American Union of Nations recognized free trade without tariff and nontariff restrictions in mutual trade. The most promising in integrating cooperation between members of the group defined a new energy projects. Member States rely on the fact that energy integration will help to form a single economic space in South America. 2007 the government of Argentina, Bolivia, Brazil, Chile, Ecuador, Paraguay signed the Act to establish Banco del Sur with a capital of $ 7 billion

Yet the South American Union of Nations is still largely a political union of countries, alternative FTAA, than an expression of the aspirations of participating countries to full economic integration. In addition, between MERCOSUR countries and Andes Community of Nations are available for significant differences.

Almost all Latin American countries within the integrated groups and the entire region, according to researchers, have mutual claims on various aspects of trade relations among themselves - about the tariffs, rules of origin, taxation, anti-dumping and so on. Lack of clear certainty about the prospects, the strategy of economic integration. On the one hand, the apparent reluctance of some countries in the region, with Brazil in the lead, to join the FTAA in a Washington, on the other - the desire of some of them to active trade with the United States on the principles of free trade agreements with access to a huge and competitive North American market. Special position follows a group of countries exporting oil and gas.

Thus, the efforts of Latin America aimed at accelerating regional and subregional integration processes in the presence of centrifugal and centripetal processes (integration and disintegration) trend rise phenomenon stalled integration. And the reason for such zahalmovanosti hidden contradictions in the interests of too many criteria for various countries, their inability to create a mechanism for jointly solving these contradictions.

7.2.3. Chilean model. At the beginning of XXI century Chile, against the backdrop of stalled integration, has proved itself as a country, whose economy is growing fastest in Latin America, with stable political system and with democratic legal state institutions and civil society.

The Chilean model is special because the country for a long time refrained from entry into any of the integration associations in the region and beyond it in the status of full-scale membership unless except for the Latin American Association, the associated membership of MERCOSUR and a short-term stay at the Andean Community of Nations.

Chile has gone by the way of the practice of economic integration, typical in the end of ХХ – at the beginning of XXI centuries, the legal framework of which were mostly bilateral agreements on economic complementarity and bilateral agreements on free trade. Such agreements have served as the additional and rather essential external factor of economic development in general, and especially of foreign trade.

Since 90-th years of the last century Chile has signed dozens of bilateral agreements mainly on economic complementarity, preferably with partners of the Latin American region and bilateral free trade agreements with the region countries, and behind its limits. In particular, with the USA and Canada, EU and EFTA, with the Republic of Korea and the Chinese People's Republic. As a result, the lion's share of Chile's foreign trade is carried out on the preferences within the bilateral agreements and treaties. In this sense the example of Chile is indicative enough for the Latin American countries. While certainly can not be said, what models of economic cooperation - bilateral integration or multilateral agreements and contracts - can be considered the most effective, which of these is better.

Anyway, the Chilean model of trade and economic cooperation with the countries-partners, as well as the foreign policy of the country, is directed on favourable use of agreements on free trade, and is the evidence, on the one hand- the opennesses of its economy, on the other - the desire to maximize access to the markets of the countries and integration groupings with which concluded treaties and agreements on liberalization.