Although Mercosur, the South American Common Market, is confronting “serious problems,” it continues to be a viable project supported by geography, history, culture and the common interest, according to a declaration today by Inter-American Development Bank President Enrique V. Iglesias.
In a message to the XXIII Meeting of the Council of the Common Market, held in Brasilia, Iglesias said the Mercosur bore fruit immediately after it was created in 1991, but he also noted that “the waters of the world economy are turbulent, and hence the external environment is not as favorable for regional integration as was the case in the early 1990s.”
“The Mercosur economies have been under tremendous stress,” the IDB president noted. “Meanwhile, the competitive forces of globalization continue their march forward and threaten to leave behind those countries that do not successfully engage the process.”
Calling Mercosur “at a crossroads,” he said the initiative “needs to be relaunched” with a “renewed political commitment and leadership to guide the bloc to a common path.”
Iglesias outlined several steps that could revitalize Mercosur, among them stable access to markets within the bloc, credible and effective norms, the elimination of nontariff barriers, the re-establishment of a common external tariff and the strengthening of regional commercial disciplines.
The IDB president urged the ministers to “move beyond the intergovernmental arrangements that dominate today” by establishing a “lean but highly professional technical secretariat,” refining dispute resolution mechanisms, creating an adequate institutional framework for a full customs union, establishing mechanisms for systematic macroeconomic coordination that could lead to a common monetary unit and strengthening the “four plus one formula” for third party negotiations.
The consolidation of Mercosur is “a high priority for the Bank,” which is committed to working with its governors to “fulfill the goal of a dynamic and internationally respected Mercosur,” Iglesias concluded.