MERCOSUR: History and Aims

By Perez del Castillo, Santiago | International Labour Review, January 1, 1993 | Go to article overview

MERCOSUR: History and Aims


Perez del Castillo, Santiago, International Labour Review


On 26 March 1991 the Presidents of Argentina, Brazil, Paraguay and Uruguay met in Asuncion and launched the negotiations which are expected to result in the establishment of the Common Market of the Southern Cone (MERCOSUR). Agreements to be reached in the near future will complement decisions that have already been taken and bring about a wider market as from 1 January 1995. MERCOSUR represents a historic opportunity for the Atlantic-rim countries of South America to pool and harness their vast potential for the greater prosperity of their inhabitants. These four nations have understood that a joining of forces and the synergy resulting from the ensuing union will give greater impetus to their economic development.

The Treaty of Asuncion aims at establishing a single market among the four republics, based on the free movement of goods, services and factors or production; the establishment of a common external tariff and trade policy; the coordination of macro-economic and sectoral policies; and the harmonization of their respective legislations in order to strengthen the process of integration. The Treaty also calls for the gradual reduction of tariffs over eight consecutive six-month periods, with a view to eliminating all tariffs and non-tariff restrictions to internal trade by 31 December 1994.

From the outset, the Treaty was seen as a means for initiating a process of economic integration, rather than as a constitutional instrument for the common market. This is why it does not contain social clauses, or provisions for social integration. This omission has since been remedied through the establishment of a negotiating body for social and labour issues, as we shall see below. Another reason for the absence of a social chapter in this document is the fact that it grew out of a set of bilateral commercial agreements between Argentina and Brazil. First Uruguay, and then Paraguay. joined this process, leading to the signing of the Treaty in the latter's capital city.

Most observers consider that negotiations are progressing reasonably well and that deadlines are being met, although there have been difficulties, as is to be expected in any process of integration. Several of these difficulties have already been resolved.

The process is taking place against the general backdrop of economic liberalization, as evidenced by the fact that the signatory governments informed the GATT in April 1992 of their intention to keep their common external tariff below 35 per cent, contingent upon a successful conclusion of the Uruguay Round. They are now considering the possibility of reducing this tariff as from 1 January 1995.(1)

For at least three years now, the entire region's political climate has been clearly marked by a trend towards integration. The four countries have chosen similar paths; to one extent or another all have espoused economic liberalization, the strengthening of democratization, the guarantee of trade union freedoms, and the retrenchment of the State.

The purpose of this article is to report on the social and labour aspects of this process of economic integration, through a prospective analysis focusing on a legal view of the world of work. We shall begin with a brief history and overview of the present situation in the Southern Cone, before discussing the internal organization of MERCOSUR and the major social and labour issues now under debate: the adoption of common standards (a charter of fundamental rights, freedom of movement, social security, etc.), employment problems, conditions of work, and the prospects for collective bargaining at community level.

THE REGION: ITS HISTORY AND PRESENT SITUATION

The four countries have an aggregate population of 200 million and a surface area of 11 million square kilometres. Although people of European extraction predominate, the societies of these countries are multiracial, given the Japanese and Korean immigrants in some areas of Brazil and Paraguay, and the people of African origin; in addition, the indigenous pre-Columbian population is still found in some areas.

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