MERCOSUR is an economic and political union formed in 1991 by Argentina, Brazil, Paraguay, and Uruguay to promote the free movement of goods, services and people among member states. MERCOSUR’s primary interest was to eliminate obstacles to regional trade, such as high tariffs and income inequalities. In 1994 the MERCOSUR countries also established a protection agreement that guarantees nondiscriminatory treatment, prohibits performance criteria such as minimum exports or local inputs, and bans restrictions on capital repatriation. In 2008, Venezuela, Chile and Bolivia became associate members of MERCONSUR. Peru, Ecuador, Colombia have expressed their willingness to join the group, and Mexico has shown a growing interest as well. MERCONSUR’s main objective is to increase the efficiency and competitiveness of the all member economies by opening markets, promoting economic development in a globalized world, improving infrastructure and communications, making better use of available resources, preserving the environment, generating industrial complementation and coordinating macroeconomic policies. Achieving a common external tariff is one of the main goals of the block.
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