Mercosur - Changing Course?

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:


Case Code : BENV002 For delivery in electronic format: Rs. 400 ;
For delivery through courier (within India): Rs. 400 + Rs. 25 for Shipping & Handling Charges


Case Length : 19 Pages
Period : 1991-2005
Pub Date : 2006
Teaching Note : Not Available
Organization : -
Industry : -
Countries : Latin America


The case elaborates on the factors that led to the creation of Mercosur as a free trade area, especially the long-drawn out efforts for Latin American integration. The case discusses in detail Mercosur's initial successes and also its institutionalization. It then turns the focus on to its transition into a customs union and discusses how its success was hampered by the changes in the international environment. It goes into the currency systems in Brazil and Argentina in detail and how they complicated the matter of economic cooperation between the two economies. The case also takes a look at the problems faced by developing economies in trying to forge a link between the domestic politics in their respective countries and at the necessity for regional integration.

It looks at the problems faced by small economies that are sandwiched between large economic powerhouses and ends with a note on Mercosur's subtle transformation from being an economic bloc to a political solidarity bloc.


To appreciate the efforts of developing economies to give up belligerent policies and strive for economic development

To recognize the efforts made toward Latin American integration

To understand the various stages and aspects of economic integration as well as the benefits and challenges in accomplishing them

To comprehend how the external environment can affect the growth and functioning of a trade bloc

To understand the interplay between national politics and regional integration


  Page No.
Introduction 1
Background 2
Creation of Mercosur: The Initial Years 3
Mercosur: An Incomplete Customs Union 5
The Crises 6
Effects of the Financial Crises 8
Exhibits 13


MERCOSUR, Customs Union, The Latin American Free Trade Association, Latin American Integration Association, Free Trade Area, Common External Tariff, Tariff Barriers, Non-Tariff Barriers, Treaty of Asuncion, European Union, The Ouro Preto Protocol, Free Trade Area of the Americas, Andean Community, South American Free Trade Area, Monetary Union

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