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INTAL Connection: No 247: April, 2017
INTAL Connection informs on developments on integration and trade in Latin America and the Caribbean. This issue focuses on the symposium and presentation of the publication of “MERCOSUR Futures: New directions in regional integration”, that includes precise diagnostics of the current situation within the bloc and puts forward creative ideas for moving along a path of sustainable development with options for strengthening integration in the current context.
Countries
Publication Date
March 15, 2017
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INTAL Connection: No 251: Julio, 2017
INTAL Connection informs on developments on integration and trade in Latin America and the Caribbean. This issue focuses on the seminar “MERCOSUR–Pacific Alliance: A Positive Agenda for Integration”, held as part of the Summit of the MERCOSUR and Associated States in Mendoza, Argentina. During the seminar, authorities, representatives from the private sector, and integration experts discussed issues including regional value chains, trade facilitation, and customs cooperation.
Countries
Publication Date
July 23, 2017
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INTAL Monthly Newsletter: No. 188: April, 2012
This document is about Integration Blocs, Active trade policies in MERCOSUR countries in response to international slowdown, 6th Summit of the Americas, 4th Summit of BRICS leaders and IDB-INTAL activities.
Countries
Publication Date
April 01, 2012
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Improving the Access of Mercosur's Agriculture Exports to United States: Lessons from NAFTA
In the last 15 years or so Mercosur countries have implemented trade liberalization reforms both unilaterally and at regional level. These reforms have been successful in promoting overall trade flows, but not so much with respect to exports to developed countries. This is particularly the case with the United States (US) and the European Union (EU) markets. For example, in the case of Argentina, exports to the EU have increased only 20% between 1990-2000. Exports to US have grown at higher rates but still below those observed for the rest of the world. Why is it that Mercosur products have been unable to increase their access to these markets? One reason that clearly outstands is that these countries have developed a comparative advantage in agricultural (both primary and manufactured) products and these items have been the ones that faced the strongest protection in the central economies.
Countries
Publication Date
September 01, 2004
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Tax Harmonization and Economic Integration: MERCOSUR
The issue of tax harmonization may come to the fore as part of newer proposals to deepen the economic integration. Under this more favorable assumption, this paper aims at appraising alternative scenarios for tax harmonization in the MERCOSUR and proposing a specific route to be followed. With this goal in mind, the author begins by pointing out the most important differences in the tax systems of the member countries and examining the main challenges they face to harmonize taxation in the region. Also discussed is the experience of the European Union with respect to tax harmonization, and also an appraisal of the implications of tax asymmetries. Lastly, the paper concludes with recommendations for achieving tax harmonization in the region.
Countries
Publication Date
January 01, 2005
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Taxation in the MERCOSUR and Coordination Possibilities
This paper analyzes the evolution and structure of taxation in the Mercosur countries. Specifically, it covers taxes on goods and services, including general excise taxes and excises taxes, and income taxes, both corporate and personal. It also discusses the role of the tax administration and the appellate process, and concludes with suggestions for tax policy coordination among Mercosur countries.
Countries
Publication Date
January 31, 2003
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Regional Disparities in Regional Blocs: Theory and Policy
The objectives of this paper are to explore the forces that may create disparities within a regional bloc and to assess their implications for policy. The thesis we will argue is that it is quite possible for regional integration to create disparities. Indeed, we expect it to encourage differences in the economic structures of countries, and should not be surprised if these are sometimes also associated with difference in factor prices and income levels. However, the policy response to such integration induced disparities is, loosely stated, more integration. This paper was prepared for the Inter-American Development Bank project on 'Deepening Integration of MERCOSUR: Dealing with Disparities'.
Countries
Publication Date
January 01, 2005
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Deepening integration in MERCOSUR: Dealing with Disparities
Regional integration among asymmetric countries is a hot and burning policy topic worldwide. Deepening Integration in MERCOSUR analyzes the most important issues of economic integration and policy coordination that countries face as they advance towards deeper integration and are urged to address development disparities among partner countries.
Countries
Publication Date
January 01, 2008
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Economic Integration and Location of Production Activities: The Case of Mercosur
This research aims at answering the following questions: How do specialization patterns look like in member countries of Mercosur and how have they evolved over time? How do concentration patterns look like and how have they evolved over time? What are the main determinants of locational patterns? Did Mercosur have an impact on location of economic activities? What are the consequences for the smaller countries? Do we see production clusters? We analyse specialization, concentration, and locational patterns in Mercosur using production value data for the period 1971-1998. We identify the determinants of those patterns during the period 1985-1998 using econometric techniques. In addition, we calculate intraindustry trade statistics within Mercosur and with the Rest of the World for the period 1986-2001 in order to investigate the formation of clusters and uncover their determinants. We complement this analysis with a brief description of production developments in border regions with the purpose of determining whether this phenomenon has a specific spatial dimension. Finally, we draw some conclusions about the implications for smaller countries within the bloc and some lessons for upcoming trade initiatives such as a deepening of integration within the region, the establishment of FTAA, and a free trade agreement with the European Union.
Countries
Publication Date
February 01, 2004
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Rules of Origin in FTAs in Europe and in the Americas: Issues and Implications for the EU-Mercosur Inter-Regional Association Agreement
Rules of origin (RoO) are a central topic both in the Inter-Regional Association Agreement negotiations between the European Union (EU) and the Southern Common Market (Mercosur), and in the 34-country negotiations of the Free Trade Area of the Americas (FTAA). The purpose of this paper is to provide a detailed mapping of the different rules of origin regimes in FTAs in Europe and the Americas, and to draw lessons from these regimes to the EU-Mercosur RoO negotiations, in particular. The paper offers four recommendations. First, the EU¿s standardized RoO regime will play a central role in the EU-Mercosur RoO negotiations. However, there is plenty of room for mutual tariff concessions. At the minimum, the EU¿s tariff preferences for Mercosur should approximate those provided to Chile in order to foster Mercosur¿s chances to augment its industrial exports to the European market. Second, the EU-Mercosur FTA RoO regime should incorporate general and sector-specific adjustment mechanisms in order to enable Mercosur to better utilize the preferential treatment provided by the EU. Third, Mercosur will need to further consolidate its common market in order to take full advantage of the RoO regime¿s likely provision of diagonal cumulation. Fourth, Mercosur should make the most of its strategy of simultaneous trade negotiations in the Americas and with the EU by ensuring a high degree of compatibility between its two major future agreements.
Countries
Publication Date
January 01, 2004
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The Trade and Cooperation Nexus: How Does the MERCOSUR-EU Process Measure Up?
The objective of this study is to analyze the interaction between trade and non-trade cooperation in some of the today's major regional initiatives, particularly those between developing and industrialized countries. The study suggests a framework to explore what the paper calls a "trade and cooperation nexus". The modalities of this nexus can take different forms. For instance, non-trade cooperation may be an integral part of a formal trade or integration agreement, or may take place independently of such an agreement, as an ex-ante, ex-post or parallel agreement. This paper analyzes the EU approach, which proposes an unusually tight trade and cooperation nexus based on a three-pillar approach uniting political, economic and trade cooperation under a single umbrella agreement. Theoretically this approach should be attractive, especially in North-South agreements, because the promise of linking free trade with cooperation programs could enhance the benefits of the former for both parties. However, while innovative, the nexus is challenging in its construction and delivery. The paper will explore EU efforts in this area in the broader context of what is happening in other North-South initiatives.
Countries
Publication Date
March 03, 2003
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The Use of Free Zones for the Promotion of the Offshore Industry in MERCOSUR Countries: A Reasonable Choice?
This paper discusses the suitability of using free zones as a mechanism for the promotion of the offshore industry in MERCOSUR countries, both from a legal and a broader policy perspective. From a legal perspective, the paper examines the consistency of the incentives offered by free zones with WTO disciplines and discusses the implications that stem from this for offshore suppliers that operate within free zones. The paper also discusses the merits of using free zones in light of the attributes sought by multinational corporations when choosing an offshore destination and suggests that, instead of offering goods-biased fiscal incentives, governments should focus on improving IT and communications infrastructure, training the local workforce, encouraging research and development, upgrading the legal framework, and securing a business-friendly environment.
Countries
Publication Date
December 01, 2011
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Towards a Strategy for Economic Growth in Uruguay
The Uruguayan economy is recovering from the 2002 financial crisis that disrupted its banking system, caused a collapse of its currency and seriously affected its fiscal solvency. The crisis was clearly associated with the collapse of the Argentine economy and its concomitant currency, banking and debt crises. Both were also related to the sudden stop that followed the Russian crisis of 1998, which prompted an important realignment of the real in January 1999, a fact that had exerted enormous pressure on bilateral exchange rates within Mercosur. In this post-crisis period, Uruguay now faces several challenges to attain a sustainable growth path. This report proposes a series of recommendations towards this end. Implementing a strategy to accelerate growth inevitably involves interventions at both the macro and the micro level. The macro level involves the maintenance of a stable and competitive real exchange rate, so as to create a stable and encouraging environment for export growth. The authors take up each of these elements of the growth strategy. They first focus on the design of incentive policies for economic diversification and promotion. Then they discuss next the macroeconomic complements, with special emphasis on maintaining a competitive and stable real exchange rate.
Countries
Publication Date
February 01, 2005
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Trade Liberalization and the Political Economy of Protection in Brazil since 1987
The paper analyses aspects of trade liberalization and the political economy of protection in Brazil since 1987. Section I considers the internal and external constraints to the continued adoption of a strategy based on import substitution industrialization. In section II trade liberalization up to 1994 is described including its adjustments related to the creation of Mercosur. It also places trade liberalization in the context of the wider reforms implemented in Brazil in the 1990s. The impacts of trade liberalization on import penetration, productivity and the cost of investment as well as its distributive effects are examined in section III. The relative importance of trade liberalization and inflation acceleration on the cost of investment is also discussed. Section IV deals with the political economy of trade liberalization and the protectionist backlash in the mid-1990s. An analysis is made of long-term factor mobility and the Brazilian case is compared with findings on other economies about the transition from a political economy of protection centered on the clash of "class interests" to one concerned with "special interests".
Countries
Publication Date
April 01, 2004
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Trade Potential in Southern Cone Countries
A trade gravity model is used to calculate the bilateral export potential of Southern Cone countries (Argentina, Brazil, Chile, Paraguay, and Uruguay) and identify patterns of weak performance across destinations and productive sectors. After controlling for key trade fundamentals and country and time effects, we find that exports to large advanced economies like the United States and the European Union fall short of expected levels. Potential trade with the rest of Latin America shows a high degree of heterogeneity across sectors and countries. Exports within the Southern Cone are generally above the predicted value, but there is still space for higher flows, particularly regarding Chile-MERCOSUR relations.
Countries
Publication Date
March 19, 2018
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Trade Related Capacity Building: An Overview in the Context of Latin American Trade Policy and the MERCOSUR-EU Association Agreement
Trade has become an increasingly important strategic objective for developing countries. This is a relatively new phenomenon for many of them. Hence the demand to intensify an insertion into the world economy often advances faster than their institutional capacities to formulate effective strategies, trade policies and institutions. This is further complicated by the fact that the insertion is increasingly being undertaken through negotiation of ever more complex trade agreements with important asymmetries between the parties and large repercussions from market opening. Under these circumstances it is not surprising that trade-related capacity building (TRCB) has increasingly gained the attention of developing countries and donors alike. By practicing the art of the possible many advances have been achieved. But many shortcomings are still hindering the delivery of effective TRCB; ironically, some of them being outgrowths of attempts to perfect TRCB.
Countries
Publication Date
February 01, 2005
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Integration & Trade Journal: Volume 15 : No. 33 : July-December, 2011
The Integration & Trade Journal includes articles on the different aspects of integration in Latin America and the Caribbean, on hemispheric integration and, furthermore, on similar processes in other parts of the world. The Journal issued a call for the submission of papers that reviewed regional integration processes in Latin America and the Caribbean. This issue includes a collection of the many papers submitted. The titles include: Why it is Worth Rethinking Latin American Integration?; Financial Cooperation within the Context of South American Integration: Current Balance and Future Challenges; The Relevance of LAIA; The Andean Integration Process: Origins, Transformations and Structures; 20 Years on: The Achievements and Pending Challenges of MERCOSUR; MERCOSUR and the Challenges of its Joint Trade Policy: Achievements and Shortcomings of a Process of Incomplete Communitarization; Increasing the Trade Related Capacity of CARICOM Firms in a Post-Crisis Global Economy: The Role of Standards and Regulations; Caribbean Integration: A Rules of Origin Perspective. There's also a special section on Latin American Trading Blocs: Between Reality and Utopia, and a series of interviews to Patrick Low, Anabel González, Ganeshan Wignaraja, and Alejandro Krell.
Countries
Publication Date
December 01, 2011
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Integration & Trade Journal: Volume 3 : No. 9 : September-December, 1999
The Integration & Trade Journal includes articles on the different aspects of integration in Latin America and the Caribbean, on hemispheric integration and, furthermore, on similar processes in other parts of the world. This issue includes the following articles: Why "Rebuilding the Caribbean" Requires NAFTA Parity for CBI Countries: Towards a "Win-Win" Strategy; Colombia and the NAFTA; MERCOSUR: Why Does Monetary Union Make Sense in the Long-term?; MERCOSUR: The Incompatibilities between Its Institutions and the Need to Complete the Customs Union: A Proposal Reform; and, Electronic Commerce in the Americas.
Countries
Publication Date
January 01, 2000
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Integration Options for MERCOSUR: A Quantitative Analysis by the AMIDA Model
The recent developments at the multilateral and regional fronts call for a re-evaluation of trade and integration options for MERCOSUR. Applying a brand new CGE model, we evaluated six scenarios. The simulation results indicate that trade agreements will generate relatively small but positive gains. Integration with the Unites States and the European Union, two key partners, will have somewhat divergent and opposite outcomes. Agriculture will be a clear winner, while MERCOSUR has competitiveness issue in capital-intensive manufacturing sectors. It is revealed that the bloc's present trade policy is on a right track. Nevertheless it is undoubtedly important for the bloc to clinch regional initiatives with long-term perspective, and essential to streamline and modernize their productive sectors for sustained trade balance and growth.
Countries
Publication Date
January 18, 2008
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Mercosur Report No 26: MERCOSUR: Strategic Divergences and Pragmatic Consensus
From the Institute for the Integration of Latin America and the Caribbean (INTAL), from the Integration and Trade sector (INT), from the Inter-American Development Bank (IDB), we work on issues linked to the consolidation of the integration processes of the region, and the strengthening of trade policies. In this framework, the MERCOSUR Report is one of the studies systematically prepared by INTAL, which allows us to visualize the trajectory of this integration process. This edition, which analyzes the situation of the bloc between January 2022 and June 2023, finds a Mercosur seeking to respond to internal and external challenges, given the profound changes in the international scenario. In this regard, the member countries have expressed a series of shared diagnoses and consensus around the grand narratives of regional integration. The period analyzed here has shown some results to strengthen integration and renew the importance of the regional project. Mercosur expands the scope of regional integration, with a rich agenda of technical, political and social cooperation; but this construction is done without having consolidated the foundational economic integration, relative to trade flows. The report also analyzes the material base and the great potential that the region has for the development of biotechnology, as a key tool that can contribute to adding value to the export of goods from the bloc.
Countries
Publication Date
December 04, 2023
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National Disparities and Regional Allocation of Resources: A Positive Framework
Deeper integration of MERCOSUR aims at reducing the barriers to the international mobility of goods, factors and ideas as well as at promoting effective policy coordination among member countries. Lower barriers make the interactions among customers and suppliers in the integrated area increasingly tight, thus fostering the creation of a common market within the MERCOSUR economic space. The present paper proposes a theoretical framework to assess the economic impact and the welfare implications of the resulting reallocation of resources across firms and countries. Its final purpose is to answer the central questions whether and how the distribution of the associated costs and benefits might create resistance from national interests to move towards deeper integration. This paper was prepared within the framework of "Deeper Integration of MERCOSUR: Dealing with Disparities."
Countries
Publication Date
January 01, 2005
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