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Max Planck Encyclopedia of Public International Law [MPEPIL]


Jan Peter Schmidt

From: Oxford Public International Law (http://opil.ouplaw.com). (c) Oxford University Press, 2015. All Rights Reserved.date: 25 August 2019

Regional co-operation — Competition — Specific trade agreements — Technical barriers to trade

Published under the auspices of the Max Planck Foundation for International Peace and the Rule of Law under the direction of Rüdiger Wolfrum.

A. Historical Background and Establishment

MERCOSUR was launched in 1991 when Argentina, Brazil, Paraguay, and Uruguay signed the Treaty of Asunción, aiming to create the Common Market of the South (in Spanish Mercado Común del Sur [‘MERCOSUR’], in Portuguese Mercado Comum do Sul [‘MERCOSUL’]). In 1994 MERCOSUR was institutionally restructured by the Protocol of Ouro Preto (‘POP’) and became a subject of international law (Subjects of International Law) (see also International Law, Regional Developments: Latin America; Regional Co-operation and Organization: American States).

MERCOSUR took shape from the Argentine-Brazilian co-operation that was initiated in 1980 and steadily intensified from 1985 after both countries had returned to democracy from military dictatorship. Argentina and Brazil pursued access to new markets in the first place, but also aimed at overcoming historic geo-political rivalry and mutual distrust. In 1986 the Programme for Integration and Economic Co-operation was created, which envisioned a gradual integration by virtue of specific agreements for determined sectors of the economy. Subsequently, 24 protocols were signed within this framework. The 1988 Treaty of Buenos Aires on Integration, Co-operation and Development and the 1990 Act of Buenos Aires went one step further and envisaged the establishment of a common market by the end of 1994. In addition, agreements concerning binational companies and judicial co-operation were concluded.

Paraguay’s and Uruguay’s wish to join the process was natural, as Brazil and Argentina were (and still are) by far their most important trading partners. Uruguay’s gradual inclusion into the existing agreements was already envisioned in the 1988 Acta de Alvorada. Paraguay became officially part of the process in 1990.

Yet in 1991, MERCOSUR was formally integrated into the framework of the Latin American Integration Association (ALADI) as a so-called ‘agreement of partial scope’. Notification of the Treaty of Asunción according to the General Agreement on Tariffs and Trade (1947 and 1994) (‘GATT’) was made via ALADI, invoking the ‘enabling clause’. This procedure was criticized by other members of the GATT, who deemed notification via Art. XXIV GATT necessary.

Although MERCOSUR forms part of the Latin American movement towards economic integration that started in the 1950s, the approach chosen was quite different from those of former, rather unsuccessful attempts: MERCOSUR is aimed at liberalizing commerce not only between the Member States, but also between MERCOSUR and third States. This implied a farewell to the model of import substitution, which since World War II had reigned in many Latin American countries and which had also been recommended by the Economic Commission for Latin America of the United Nations (United Nations, Regional Commissions). This protectionist approach had allowed for building up national infant industries, but only at the price of renouncing technology transfer and foreign investment. The creation of MERCOSUR thus marked the Member States’ wish to improve the competitiveness of their economies, to attract foreign investment and to become part of the world market.

MERCOSUR is open to accession, through negotiation, by other members of ALADI (Art. 20 Treaty of Asunción). To date, full membership has only been granted to Venezuela, although its accession to MERCOSUR has been the cause of ongoing political turmoil. The other South American States have obtained the status of Associate Member (Chile in 1996, Bolivia in 1997, Colombia, Ecuador and Venezuela in 2005, and Peru in 2006) and have concluded free trade agreements with MERCOSUR (Free Trade Areas). Bolivia’s accession as a full member was signed in 2015 but still requires ratification. Also, it is disputed whether Bolivia can become a member of MERCOSUR as long as it continues to be part of the Andean Community of Nations (CAN).

Recent years have been marked by fundamental political and legal conflicts regarding membership issues. In June 2012, Argentina, Brazil, and Uruguay declared Paraguay’s legal status to be suspended. This was an immediate reaction to the impeachment of Paraguayan President Fernando Lugo, which allegedly had violated the requirements of due process and was thus regarded as a disruption of the country’s democratic order. The 1998 Protocol of Ushuaia, which was signed also by Bolivia and Chile, does indeed allow for the suspension of a country’s membership status in such a case; however, the decision arguably respected neither the institutional framework of MERCOSUR nor the procedural requirements established by the Protocol of Ushuaia. Even more problematic was the fact that the suspension of Paraguay’s membership was taken as a chance to complete the accession of Venezuela to MERCOSUR, which had been signed previously in 2006 but still lacked Paraguay’s ratification. Paraguay’s challenge of both measures before the Permanent Appeals Court of MERCOSUR (MERCOSUR, Permanent Appeals Court) was rejected for formal reasons, and legality was only restored when Paraguay saw its suspension lifted in 2013 and went on to ratify Venezuela’s accession at the beginning of 2014. Venezuela’s new membership was short-lived, however, since by the end of 2016 it had already been suspended by the four founding members of MERCOSUR. The official reason was Venezuela’s failure to adjust its domestic legislation to existing MERCOSUR law, despite repeated extensions of the time periods set out in the Accession Protocol of 2006 (Protocolo de Adhesión de la República Bolivariana de Venezuela al MERCOSUR). However, deep ideological differences and doubts about Venezuela’s commitment to democracy and the protection of human rights seem to have been the real driving factors for the suspension, which again appears to be legally flawed, at least for procedural reasons. Venezuela commenced arbitral proceedings, but before their conclusion the other Member States finally declared the country’s membership to be suspended also on the basis of the Protocol of Ushuaia, invoking the disruption of Venezuela’s democratic order. This was a direct reaction to the election of a Constituent Assembly in July 2017, which was widely condemned as illegal. Further developments are hard to predict and seem largely to depend on the future of the Venezuelan regime.

B. Main Purposes and Fields of Activities

According to Art. 1 (2)–(5) Treaty of Asunción, the common market to be established between the Member States shall, inter alia, involve: a) the free movement of goods, services, and factors of production through the elimination of customs duties and non-tariff restrictions (Commodities, International Regulation of Production and Trade; Goods, Free Circulation of; Non-Tariff Barriers to Trade); b) the establishment of a common external tariff (‘CET’) and the adoption of a common trade policy; c) the co-ordination of macroeconomic and sectoral policies in order to ensure proper competition between the Member States in the areas of, inter alia, foreign trade, agriculture, industry, fiscal and monetary matters, foreign exchange and capital, services, customs, transport, and communications (Monetary Law, International; Services, Trade in); and d) the harmonization of legislation in the pertinent areas (Unification and Harmonization of Laws). The purposes of MERCOSUR thus bear strong resemblance to the purposes of the European (Economic) Community (‘EC’), which had obviously served as a point of reference, though not so much as regards the legal structure (see para. 15 below). Unlike for instance the North American Free Trade Agreement (1992), MERCOSUR’s integration process is supposed to be continuously evolving by way of constant negotiations between the Member States (‘spill-over effect’).

December 1994 was fixed as the end of the transition period for the establishment of a common market. In the spirit of the flexible approach provided by ALADI, Paraguay and Uruguay were granted an additional period of one year. In 1994 both transition periods were extended for another four years until the end of 1999 and 2000. Not surprisingly, these highly ambitious transition periods proved to be unrealistic, but they had the positive effect of putting the Member States under pressure. Especially during the 1990s, trade barriers were continuously reduced, leading to multiplication of intra-regional trade and steady growth of foreign investment.

10 At present the establishment of a common market remains a future goal; MERCOSUR’s current progress has been limited to the formation of an incomplete customs union (Customs Unions). Intra-regional trade has been liberalized for almost 90% of products appearing in MERCOSUR’s nomenclature. For about the same quantity a CET has been established, ranging between 0–20%. These figures can be misleading, though, as various sectors that play a huge part in intra-regional commerce, eg, automobiles, sugar and electronics, have so far been excluded from the liberalization programme. Also, many non-tariff barriers are yet to be abolished. For this purpose, a ‘Customs Code’ (Código Aduanero) was adopted in 2010, but it still needs to be incorporated by the Member States (a first Customs Code had been issued in 1994 but never came into force).

11 Market freedoms other than the free movement of goods have only been developed on a rudimentary level: the 1997 Protocol of Montevideo on the Free Commerce of Services (CMC/Dec No 12/98) came into force between Argentina, Brazil and Uruguay in 2005, but still needs to be concretized by further negotiations. The free movement of physical persons has been promoted by, inter alia, rules facilitating short-term visits and settlement in other Member States, rules on recognition of university and technical college diplomas obtained in other Member States, and by an agreement on social security rights for employees (Movement, Freedom of, International Protection; Social Security, Right to, International Protection).

12 Legal harmonization has taken place in various areas. The 1992 Protocol of Las Leñas on Judicial Co-operation (‘Las Leñas Protocol’; CMC/Dec No 5/92) deals with judicial assistance between the Member States in the areas of private, labour and administration law, and contains rules on, for example, notification, evidence and recognition of court decisions, arbitral awards and legal instruments (Mutual Legal Assistance in Administrative Matters; Mutual Legal Assistance in Civil and Commercial Matters; Recognition and Enforcement of Foreign Arbitral Awards; Recognition and Enforcement of Foreign Judgments; Recognition of Foreign Legislative and Administrative Acts). The Las Leñas Protocol is complemented by the 1994 Protocol of Ouro Preto on Provisional Measures of Protection (CMC/Dec No 27/94; Interim [Provisional] Measures of Protection). In the area of private international law, special mention should also be made of the 1994 Protocol of Buenos Aires on International Jurisdiction for Contractual Obligations (CMC/Dec No 1/94) and the 1996 Protocol of San Luis (CMC/Dec No 1/96), which contains provisions on international jurisdiction and applicable law in matters of civil responsibility arising out of road accidents. The 1998 Agreement on International Commercial Arbitration (CMC/Dec No 3/98 and 4/98) received a lot of criticism for its technical flaws and has gained little practical importance so far (Commercial Arbitration, International). In the field of criminal law, a protocol on judicial co-operation was also created (1994), which was complemented, inter alia, by a 1998 agreement on matters of extradition (Mutual Legal Assistance in Criminal Matters). The 1998 Social and Labour Declaration laid down a series of principles and rights in the labour area (Labour Law, International). In other areas harmonization has been initiated, but not, or not yet, fully put into effect by the Member States. This goes for the areas of intellectual property law, transport law, foreign investment law, competition law, and consumer protection law (Intellectual Property, International Protection; Investments, International Protection).

13 Apart from the mentioned agreements with other ALADI members, MERCOSUR has undertaken efforts to establish or extend trade relations with States or organizations outside South America. Thus far, however, no tangible results have been achieved. Negotiations with the European Union (‘EU’) on an inter-regional association agreement had been started in 1999, but divergences related to trade issues have not so far been overcome. In the negotiations with the Northern American States about the creation of a Free Trade Area of the Americas (FTAA), MERCOSUR did not participate as a bloc, but a result was ultimately impeded by the Member States’ co-ordinated resistance.

C. Structure, Organs, Decision-Making Process, Financing

14 The structure that MERCOSUR was given in the Treaty of Asunción was of rather basic and explicitly provisional nature. The POP concretized and expanded this structure and instituted it as a definite institutional framework for MERCOSUR. Since then further partial reforms have taken place.

15 MERCOSUR’s present structure is explicitly inter-governmental and not supranational (Supranational Law), as no transfer of sovereignty has taken place. In this respect MERCOSUR differs fundamentally from the EC/EU and also from the CAN. In combination with the political system of presidentialism that traditionally reigns in the current Member States, MERCOSUR follows a strict model of top-down integration.

16 MERCOSUR consists of three decision-making bodies: a) the Common Market Council; b) the Common Market Group; and c) the MERCOSUR Trade Commission (Art. 1 POP; see also International Organizations or Institutions, Decision-Making Bodies).

17 The Common Market Council (‘CMC’) as MERCOSUR’s highest body is entrusted with the political management of the integration process and the taking of decisions in order to achieve the objectives established by the Treaty of Asunción. The CMC also acts as the legal representative of MERCOSUR. It is made up of the Ministers of Foreign Affairs and the Ministers of Economy, or their equivalents, of the Member States. The CMC meets whenever it is deemed opportune, but at least once every six months, with the participation of the Member States’ Presidents. The pro tempore presidency of the CMC is exercised by rotation among the Member States for a period of six months. The CMC is assisted by several working groups, in particular the ministers’ reunions. The CMC takes action in the form of ‘Decisions’ (Arts 3–9 POP). In 2003 the Commission of Permanent Representatives of MERCOSUR was created as a new sub-organ of the CMC (CMC/Dec No 11/03). It is comprised of the MERCOSUR Ambassador of each Member State and a President, who can legally represent MERCOSUR if empowered by the CMC.

18 The Common Market Group (‘CMG’) is MERCOSUR’s executive body. It is made up of four nominal members and four alternate members per Member State, among whom the Ministry of Foreign Relations, the Ministry of Economics and the Central Bank must be represented. The CMG’s main task is to initiate and to carry out the decisions of the CMC. In addition, it can be empowered by the CMC to negotiate with third States and organizations. The CMG is assisted by several working subgroups and ad hoc groups. It meets as often as necessary. The CMG acts in the form of ‘Resolutions’ (Arts 10–15 POP).

19 The MERCOSUR Trade Commission (‘MTC’) is entrusted with assisting the CMG and ensuring the application of the common trade policy instruments. It is also made up of four nominal members and four alternate members per Member State. The MTC meets at least once a month. It can issue both binding ‘Directives’ and mere ‘Proposals’ (Arts 16–21 POP).

20 In the spirit of the intergovernmental structure of MERCOSUR, its organs are bound to take their decisions by consensus and in the presence of all Member States (Art. 37 POP). With the exception of the ‘Proposals’ issued by the MTC, the decisions are binding in nature for the Member States. To become fully effective also within the Member States, they need to be incorporated by each of them into their domestic legal order (see paras 30–31 below). Incorporation is unnecessary only for those decisions that concern internal procedural or organizational matters of the MERCOSUR organs (CMC/Dec No 23/00).

21 Besides the decision-making bodies, three independent advisory organs exist: a) the MERCOSUR Secretariat; b) the MERCOSUR Parliament; c) the Socio-Economic Forum.

22 The MERCOSUR Secretariat is based in Montevideo, Uruguay (International Organizations or Institutions, Secretariats). Its original functions were purely administrative ones, in particular to organize the meetings of other MERCOSUR organs, to serve as the official archive for MERCOSUR documentation and to edit the Official MERCOSUR Bulletin, which has existed since 1997 as the Official MERCOSUR law gazette (Arts 31–33 POP). Since 2002, the Secretariat also fulfils a technical advisory function for the other organs, employing the services of legal experts (CMC/Dec No 30/02). Its budget is financed with the contributions, in equal parts, by the Member States.

23 The MERCOSUR Parliament is also based in Montevideo and has replaced the Joint Parliamentary Commission. It was created by the Protocol Constituting the MERCOSUR Parliament (‘PCMP’; CMC/Dec No 23/05), which came into force in 2007. The PCMP envisions two transition periods to achieve the complete functioning of the Parliament. During the first transition period from 2007–10, every Member State is represented by 18 delegates, chosen among the representatives of the national parliaments. For the second transition period from 2011–14, the delegates will be elected directly by the citizens of the Member States, in a number and proportion that is yet to be established. The Parliament’s principal functions lie in watching over the protection of democracy and human rights in the Member States, and in observing and stimulating the integration process. The MERCOSUR Parliament shall be consulted by the decision-making bodies before acting, in order to facilitate the incorporation of their decisions into the legal order of the Member States. The MERCOSUR Parliament can also make proposals for new legislation to the CMC. Its budget is financed with the contributions, in equal parts, by the Member States.

24 The Socio-Economic Forum’s function lies in representing the economic and social sectors of the Member States’ societies. It can make recommendations to the CMG (Arts 28–30 POP).

25 MERCOSUR’s dispute resolution system was first regulated by the 1991 Protocol of Brasília (CMC/Dec No 1/91) and saw an important reform in 2002, when the Protocol of Olivos created the Permanent Appeals Court of MERCOSUR (‘PAC’).

D. Specific Legal Problems

26 The legal system of MERCOSUR constitutes a model sui generis and cannot be directly compared to that of any other existing international organization or institution. As will be shown, many fundamental issues related to it remain the subject of discussion, which is not surprising concerning the relatively young age of MERCOSUR.

27 According to Art. 41 POP, MERCOSUR’s sources of law are the following: a) the Treaty of Asunción, its protocols and the additional or complementary instruments. Especially important among the protocols are the POP and the Protocol of Olivos, which form integral parts of the Treaty of Asunción. b) Other agreements celebrated within the framework of the Treaty of Asunción and its protocols. c) The Decisions, Resolutions, and Directives of the three decision-making bodies.

28 In legal writings, the sources a) and b) are usually described as ‘primary MERCOSUR law’, while the source c) is denominated ‘secondary MERCOSUR law’. The term ‘MERCOSUR law’ refers to the sum of both. The distinction between primary and secondary MERCOSUR law proves useful from a systematic point of view, but does not provide automatic conclusions as regards the rank order between the sources. An important part of legal doctrine defends a kind of pyramid with the Treaty of Asunción on top, the agreements celebrated within its framework below, and the acts of the decision-making bodies at the bottom. Other voices meanwhile cite Art. 53 POP to argue that the rank order is to be established via the lex posterior rule. This point of view is backed by examples from practice where provisions from the Treaty of Asunción were actually modified by way of a CMC Decision.

29 As regards the legal efficacy of MERCOSUR law, the distinction between primary and secondary MERCOSUR law proves useful. Primary law comes into effect between the Member States and also within each national legal order after ratification by the Member States. Herein each Member State follows its own rules for ratification and incorporation of international treaties. Nevertheless, it is still necessary to establish whether a given provision of primary MERCOSUR law is directly applicable or whether it is only programmatic in nature. As regards the free movement of goods, in MERCOSUR’s arbitration practice it has been repeatedly argued that the Member States’ duty to remove all tariff and non-tariff barriers is binding in nature. As regards the other market freedoms mentioned in the Treaty of Asunción, legal doctrine usually denies their direct applicability due to a lack of concretization (Treaties, Direct Applicability).

30 A rather complex issue is the efficacy of secondary MERCOSUR law (International Organizations or Institutions, Secondary Law). While it is immediately binding in nature between the Member States, to become effective also within the Member States it needs to be incorporated by each of them. The POP establishes a detailed procedure in order to achieve the ‘simultaneous entry into force’ of secondary MERCOSUR law (Art. 40 POP). Accordingly, after the Member States have adopted the necessary measures for the incorporation of the decision, to which they are obliged by virtue of Art. 38 POP, they shall inform the MERCOSUR Secretariat of it; after each Member State has reported the incorporation, the Secretariat shall notify this fact to the Member States. Thirty days after this communication, the decision takes simultaneous effect in all Member States, who shall publish its entry into force in their official law gazettes (Treaties, Conclusion and Entry into Force). In practice, though, this procedure, which from the beginning of MERCOSUR had been severely criticized, is rarely followed; the Member States usually just publish the incorporation act—depending on the circumstances, a parliamentary law, a governmental decree, or just an administrative directive—in their law gazettes, after which it is generally considered that the decision immediately comes into force in the respective Member State. This procedure of course directly contradicts the concept of ‘simultaneous entry into force’ and is a continuous source of legal uncertainty. In any case, it is obvious that the current regime of incorporation is hardly advantageous for the integration process, as each Member State can prevent a norm from coming into force by simply not incorporating it. At present, only an estimated 70% of secondary MERCOSUR law has been incorporated by all Member States. Various attempts have been made to accelerate the cumbersome transposition mechanism, but so far without success. One remedy discussed in legal writings is whether a decision that has not been incorporated nevertheless exerts a kind of immediate effect after the indicated incorporation period has passed—by analogy with directives in EU law (Analogy in International Law). A related object of controversy is whether a Member State in arbitral proceedings can be heard to say that a norm which it has allegedly breached has not yet come into effect because it itself or another Member State has failed to incorporate it.

31 Due to the problems connected with the legislation process of Art. 40 POP, in practice the Member States often prefer the traditional multilateral legislation mechanism, especially when the incorporation will have to be carried out by the national parliaments anyway. In these cases the Member States work out an agreement, which is then approved in the form of a CMC Decision and incorporated by the Member States according to their rules for ratification of international treaties.

32 MERCOSUR law’s ranking within the domestic legal systems is also a rather controversial issue. A considerable body of legal writers, and also the PAC in its three advisory opinions, argue that MERCOSUR law is superior to any kind of national law. This position is evidently strongly influenced by the jurisprudence of the European Court of Justice (European Union, Court of Justice and General Court), and also by the law of the CAN. The supremacy of MERCOSUR law would obviously favour the integration process, but it seems to be hard to square with MERCOSUR’s purely intergovernmental structure. It seems more convincing therefore to determine the ranking of MERCOSUR law within the domestic legal orders exclusively by virtue of the Member States’ constitutions. The constitutions of all four founding Member States establish that constitutional provisions take precedence over international law—as MERCOSUR law is. As regards the relation between international law and simple domestic law, things are more complex: while the constitutions of Argentina and Paraguay expressively lay down the prevalence of international treaties, in Brazil and Uruguay the hierarchy is determined by the rules of lex posterior and lex specialis.

33 Even if it lacks supremacy over domestic law, to say that MERCOSUR law was just ordinary international law would ignore its extent and complexity, likewise its objective to promote the creation of a common market. Therefore, there is a broad consensus that provisions of MERCOSUR law cannot be interpreted in an isolated manner, but that the legal system of MERCOSUR has to be regarded as an organic whole. In its first award the PAC argued that MERCOSUR law constitutes an autonomous legal order whose provisions have to be applied with preference over international law (Arbitration in the Matter of Prohibición de Importación de Neumáticos Remoldeados Procedentes del Uruguay [Prohibition of the Importation of Remolded Tyres from Uruguay]). This point of view brings about important consequences for the applicability of rules and principles of international law in MERCOSUR, for instance the legitimacy of measures of retorsion and the exceptio non adimpleti contractus (General International Law [Principles, Rules and Standards]; Reciprocity).

34 Once they have entered into effect, provisions of MERCOSUR law form an integral part of the domestic legal order and have to be applied by the national courts. In practice, however, the application of MERCOSUR law still leaves much to be desired, as is shown by reports published by the Secretariat on the subject. Where it applies, MERCOSUR law is often not even taken into consideration, probably due to the judges’ and legal practitioners’ lack of awareness; where it does not apply, it is sometimes cited without justification. To facilitate the uniform interpretation of MERCOSUR law in all Member States, the Protocol of Olivos introduced the possibility for national courts to ask the PAC for (non-binding) advisory opinions.

E. Evaluation

35 MERCOSUR has already gone through several phases. After its highly promising start, MERCOSUR’s vulnerability showed in 1999 when the Brazilian currency was heavily devalued and intra-regional commerce sent into disequilibrium, causing the establishment of new trade barriers. Nevertheless, the often predicted collapse of MERCOSUR or its absorption into the FTAA has not taken place. The leaders of the Member States have repeatedly expressed their wish not only to continue the integration process but also to deepen it, although there have also been calls for greater flexibility. Regardless of the repeated setbacks, MERCOSUR can be described as a relative success, especially in the light of former rather disappointing attempts at integration in Latin America. It also seems that for the South American States there is no viable alternative to economic integration if they wish to be an important player in global trade (see also Economic Integration, Comparative Analysis).

36 Having said that, the only undisputed benefit the Member States have received so far from MERCOSUR is their increased bargaining power in global trade. In order to make significant progress in the years to come, and to fulfil its goal of creating a common market, MERCOSUR will have to cope with several fundamental challenges. One stems from the fact that in its current condition MERCOSUR is a very imbalanced and asymmetric alliance (Alliances). Argentina and Brazil bring in more than 95% of MERCOSUR’s population and gross domestic product. Costs and benefits of MERCOSUR so far have not been divided equally; Argentina and especially Brazil having fared much better than the smaller partners Uruguay and Paraguay. In addition, the economic benefits of the integration process have tended to concentrate themselves in few urban centres, with other regions remaining sidelined. The problem caused by this imbalance has, of course, not gone unnoticed, and measures have been initiated to combat it, for instance with the creation of the Fund for Structural Convergence (CMC ‘Fondo para la Convergencia Estructural del MERCOSUR’ [16 December 2004] CMC Dec No 45/04). Paraguay and Uruguay furthermore keep asking for special treatment as regards commercial issues.

37 In addition, MERCOSUR will have to reconsider its legal system. It is often argued in favour of the intergovernmental structure that it allows for the necessary flexibility and avoids clumsy and expensive bureaucracy. At the same time, the example of the CAN is cited to show that supranational elements are no guarantee for successful integration either. Having said that, it cannot be denied that, in its present constitution, MERCOSUR’s progress depends exclusively on the political will of the Member States’ Presidents. Supranational elements in turn could help to overcome national egotism, develop a communitarian spirit, and enhance the efficacy of MERCOSUR law.

38 Finally, MERCOSUR needs to boost its level of social acceptance: despite a certain enthusiasm in the private sectors in the beginning, MERCOSUR has largely remained a project of the political elites. For the enduring success of MERCOSUR, integration cannot only be driven from the top, but will also need to take place at the bottom, for instance in the form of social networks.

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