THE LIBERALISATION OF TRADE IN SERVICES IN MERCOSUR

Gabriel Gari

This book contrasts the rhetoric of economic integration propagated from the highest political circles with the reality on the ground, taking trade in services in the Southern Common Market (‘MERCOSUR’) as a case study. In 1991 Argentina, Brazil, Paraguay and Uruguay signed in Asuncion, an ambitious sub-regional integration agreement aimed at the establishment of a common market facilitating the free movement of goods, services and factors of production, the establishment of a common external tariff and the co-ordination of macroeconomic and sectoral policies. Yet, almost two decades after the entry into force of the Treaty of Asuncion, MERCOSUR remains an incomplete free trade area, with a partially implemented Common External Tariff and with a significant divergence in the macroeconomic policies of the State Parties.

The gap between the commitment and conduct of the contracting State Parties has put MERCOSUR in the spotlight. The number of ‘mercosceptics’ who no longer believe that MERCOSUR is capable of securing complete economic integration in the bloc, is growing.  MERCOSUR risks soon becoming another pearl on the collar of failed Latin America’s integration attempts. Most worryingly, ‘mercoscepticism’ has reached the highest political circles, traditionally imbued with a marked pro-integration optimism.

Despite signing the Protocol of Montevideo on Trade in Services, an international agreement akin to the General Agreement on Trade in Services (GATS), and notwithstanding six rounds of negotiations, MERCOSUR is yet to remove all of the existing restrictions and the adoption of a considerable number of secondary rules for specific service sectors within the bloc. Most barriers to trade in services remain in place and there is still a long way ahead before suppliers and consumers can move freely across national borders.

The cost of not having an open, sound and transparent regulatory framework for the free movement of services within the bloc can no longer be overlooked.  Against this background, the author examines the legal framework for the liberalisation of trade in services in MERCOSUR, discusses the reasons for the current state of affairs and proposes some alternatives for unlocking the integration process as far as its deep economic integration objectives are concerned.

At a time when states across the world are lining up to sign regional trade agreements containing unqualified ‘within the border’ commitments, this book alerts the reader to the complexities of deep economic integration and its serious implications for governments’ autonomy to deal with sensitive policy issues such as public health, financial stability, cultural diversity, protection of the environment.  The book will be of interest not only to those specifically concerned with MERCOSUR’s fate, but also to legal, economic and international relations scholars, policy-makers and anyone else interested in the current trends and challenges for regional economic integration worldwide.

Gabriel Gari is a qualified lawyer and practised law in Uruguay for four years. Prior to this, he worked for the Uruguayan Supreme Court of Justice. He now lectures on Securities Regulation and Law of Finance and Foreign Investment in Emerging Economies at Queen Mary, University of London. His research interests include trade in services, regional trade agreements, the relationship between legal institutions, capital markets and economic development and financial law reform in developing countries with special focus on Latin America. He has acted as a consultant to the European Commission on barriers to trade in services in developing countries and to the European Parliament on the transposition of Life Assurance Directives in the UK, submitting evidence to the Committee on the inquiry of the ELAS affair. Gabriel has also carried out consultancy work for UNDP and UNICEF on judicial reform projects in Central and South America.

ISBN 10: 1 905017 84 7

ISBN 13: 978 1 905017 84 3

• Hardback • 2009 • £95.00