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UNCTAD-MERCOSUR in the South-South Agreements – In the middle of two models of regionalism

UNCTAD-MERCOSUR in the South-South Agreements – In the middle of two models of regionalism

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05/12/2014

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UNCTAD Virtual Institute, Knowledge Sharing, Training and Capacity Development Branch,Division on Technology and Logistics
UNCTAD VIRTUAL INSTITUTEUSP
 – 
FLACSO JOINT RESEARCH PROJECTANALYSIS OF SOUTH-SOUTH COOPERATION IN TRADE
MERCOSUR in South-South Agreements:In the middle of two models of regionalism
The views expressed in this paper are the authors' only and do not reflect, and shouldnot be represented as, the views of the United Nations Secretariat.The Virtual Institute is a programme of the Knowledge Sharing, Training andCapacity Development Branch, in the Division on Technology and Logistics,UNCTAD.The Knowledge Sharing, Training and Capacity Development Branch cooperateswith developing countries through its two sections
 – 
the Policy CapacityDevelopment Section and the Human Resources Development/TrainForTradeSection
 – 
to build skills and knowledge in the field of trade and development.Activities are grouped in three capacity-building programmes:
 
TrainForTrade
 
The Course on Key Issues on the International Economic Agenda
 
The Virtual Institutewhich provide training and capacity building to policymakers, trade practitioners, andlocal academic and training institutions in developing countries. Some of theseactivities are particularly targeting the least developed countries.
Umberto Celli and Marcus Salles
University of Sao Paolo, Brazil
Diana Tussie and Juliana Peixoto
Latin American School of Social Sciences (FLACSO), Argentina
September 2010
 
UNCTAD Virtual Institute, Knowledge Sharing, Training and Capacity Development Branch,Division on Technology and Logisticsii
 
Table of contents
List of tables ..................................................................................................................iii
 
List of figures ................................................................................................................iii
 
List of abbreviations ..................................................................................................... iv
 
Introduction .................................................................................................................... 11 The Proliferation of Regional Trade Agreements: Causes and consequences............ 2
 
1.1 Multilateral impasses and discontent ................................................................... 4
 
1.2 Economic advantages ........................................................................................... 5
 
1.3 Geopolitical strategy ............................................................................................ 5
 
1.4 WTO-plus agreements ......................................................................................... 6
 
1.5 The “spaghetti bowl” of rules
.............................................................................. 8
 
1.6 Consequences for developing countries ............................................................... 9
 
2 The WTO legal framework of Regional Trade Agreements .................................... 11
 
2.1 Regional trade and the MFN rule ....................................................................... 11
 
2.2 GATT Article XXIV .......................................................................................... 13
 
2.3 Regional trade and development: the Enabling Clause ..................................... 16
 
2.4 Integration beyond trade of goods: GATS Article V ......................................... 18
 
2.5 WTO surveillance of RTAs ............................................................................... 19
 
2.6 MERC
OSUR‟s assessment under WTO rules
................................................... 21
 
2.7 Relevant WTO jurisprudence on RTAs for MERCOSUR ................................ 23
 
3 The legal framework for the management of asymmetries ...................................... 29
 
3.1 The management of asymmetries under the GATT ........................................... 29
 
3.2 The shift towards the WTO and the current Doha Round ................................. 30
 
3.3 South-South arrangements: the Global System of Trade Preferences ............... 33
 
4 Regionalism in South America and dilemmas within MERCOSUR........................ 37
 
4.1 Open regionalism initiatives in South America over the last decade ................ 37
 
4.2 Trade in services in MERCOSUR ..................................................................... 39
 
4.3 Trade and investment in MERCOSUR .............................................................. 41
 
4.4 The “re
-
launch” of South American integration processes
................................ 45
 
4.5 Post-liberal regionalism in South America ........................................................ 48
 
4.6 Asymmetries within MERCOSUR: from the commercial agenda towardsneo-developmentalist concerns ................................................................................ 50
 
5 MERCOSUR‟s external agenda on asymmetries: Tensions between two m
odelsof South-South agreements .......................................................................................... 53
 
5.1 Agreements between MERCOSUR and extra-regional partners:MERCOSUR-India, MERCOSUR-SACU and MERCOSUR-Israel ...................... 53
 
Final remarks ............................................................................................................... 57
 
References .................................................................................................................... 59
 
 
UNCTAD Virtual Institute, Knowledge Sharing, Training and Capacity Development Branch,Division on Technology and Logisticsiii
 
List of tables
Table 1: Number of RTAs in force by legal basis ....................................................... 13
 
Table 2: Number of RTAs in force by modality .......................................................... 13
 
Table 3: Status of examinations of RTA notifications ................................................. 21
 
Table 4: MERCOSUR's weight average tariff rates and customs duties ..................... 22
 
Table 5: Current status of the protocols in MERCOSUR member states .................... 42
 
Table 6: Argentina's BITs (57 agreements, 50 in force) .............................................. 42
 
Table 7: Brazil's BITs (13 agreements, 1 in force) ...................................................... 43
 
Table 8: Paraguay's BITs (28 agreements, 26 in force) ............................................... 44
 
Table 9: Uruguay's BITs (26 agreements, 20 in force) ................................................ 44
 
List of figures
Figure 1: Evolution of RTA notifications to GATT/WTO ............................................ 3
 
Figure 2: Cross regional RTAs ...................................................................................... 8
 

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