You economic blocks they are supranational institutions, that is, that go beyond the limits of a nation, formed by the grouping of countries that have as main objective the organization of trade agreements, for this, implementing a gradual reduction of customs tariffs to in order to enhance the flow of goods between member countries and stimulate competition in certain sectors of their savings.
From the 1950s onwards, transnational companies began to direct their branches to the most different countries and, in a short time, began to dominate international trade. From this perspective, economic blocks became necessary to establish some norms and manage the flows because in a market economy, governments do not have the power to control the decisions made by these companies.
Latin America has different levels of underdevelopment, a legacy of its colonial past and diverse internal and external political practices. The economic blocs that exist in the region expose the fragility of their economies and the difficulties in promoting a more complete and comprehensive economic and political integration.
Some of Economic blocks or projects present on the continent Latin American they are:
ALBA (Bolivarian Alliance for the Americas)
In 2004, the leaders of Cuba and Venezuela presented the proposal of ALBA, a bloc that intends to integrate the region of Caribbean and the rest of Latin America from proposals to encourage mutual solidarity, social projects and economical. The bloc has effectively exchanged Cuban doctors for Venezuela in exchange for oil and trade agreements in the energy and mining sectors dominated by Venezuela, Bolivia and Ecuador. Members are: Antigua and Barbuda, Bolivia, Cuba, Dominica, Ecuador, Nicaragua, Saint Vincent and the Grenadines, and Venezuela. Honduras withdrew in 2010 alleging alleged disrespectful treatment towards the country, regarding the contrary reaction of the main members of the group to the military coup that ousted President Manuel Zelaya in the year of 2009.
SHOULDER STRAP (Free Trade Area of the Americas)
An initiative of the United States, it proposes the formation of a free trade area throughout the American continent, with the exception of Cuba. The agreement should have entered into force in 2005, but after the attacks of September 11, 2001 There has been a shift in the focus of US foreign policy adopted by then-President George W. Bush, who prioritized the offensive against countries that represented a threat to the country's security. Negotiations related to the FTAA ended up being relegated to the background, while several Latin American countries underwent transformations. considerable policies, with the rise of left-wing governments, mainly in South America, which were opposed to the implementation of the block.
One of the biggest questions regarding the FTAA is its structure, which clearly privileges the economic domination of the United States in to the detriment of industrial and agricultural production in other countries in the region, which would not be prepared for a rapid and profound opening of their savings. Another debatable point is the maintenance of subsidies offered to certain sectors of the US economy, which would make the bloc uncommitted to the region's development.
Right in his first term, US president Barack Obama presented in his plan of goals for Latin America the resumption of negotiations for the FTAA, but US foreign policy has in recent years been more focused on issues such as the Middle East (Iran, Syria, Afghanistan) and China, while domestically, the World Economic Crisis and the recovery of the country's economy still denote greater concern than relations with America Latin. Obama's second term may present news regarding bilateral agreements with Latin American countries on issues such as the fight against drug trafficking and migration.
MERCOSUR (Southern Common Market)
The bloc was created in 1991 after the signing of the Treaty of Asunción by Brazil, Argentina, Uruguay and Paraguay, the so-called full or effective members. In 2012, Venezuela assumed a position as a full member after the temporary suspension of Paraguay, whose Congress was opposed the entry of Venezuela due to political-ideological differences with the then Venezuelan president Hugo Chavez. After the process of impeachment that deposed Paraguayan President Fernando Lugo, the governments of Brazil, Argentina and Uruguay punished the Paraguay with the suspension of the economic bloc, which opened the necessary gap for the entry of Venezuela* in the Mercosur.
Full or effective countries have the right to vote on decisions that direct the bloc. Bolivia, Chile, Peru, Colombia, Ecuador, Guyana and Suriname are associate members, only participating in commercial exchanges.
Among the bloc's general objectives are the creation of a free trade area and a customs union. Among so many ambitions, the Mercosur it also seeks to standardize interest rates, create a single currency and establish free movement of people. Currently, the formation of a Customs Union is advanced in certain segments. A Customs Union is when, in addition to free trade, there is the establishment of equal tariffs between member countries with respect to products traded with countries that do not belong to the bloc.
Several confrontations have compromised MERCOSUR, such as political and economic instability in some of the member countries. In addition, the divergences regarding the direction of the bloc and the bilateral agreements hurt the organization's premises, which theoretically prioritizes the economic integration of the region and not just favoring the strongest economic sectors in the countries involved. This fact has become very common due to the lobby exercised by businessmen, large farmers and even politicians. This pressure ends up inducing governments to protect certain sectors, undermining attempts to encourage competitiveness from the entry of foreign products.
* Venezuela was suspended from Mercosur, indefinitely, in December 2016.
Julio César Lázaro da Silva
Brazil School Collaborator
Graduated in Geography from Universidade Estadual Paulista - UNESP
Master in Human Geography from Universidade Estadual Paulista - UNESP
Source: Brazil School - https://brasilescola.uol.com.br/geografia/blocos-economicos-america-latina.htm