Role of Mercosur in regional trade growth

Outlines the development of Mercosur (South American economic bloc) and considers the assertion that it protects inefficient Brazilian industries and has failed to create extra trade. Analyses selected 1990‐1997 data for Brazil, Argentina, Paraguay and Uruguay to show that trade and foreign investment have increased since its formation in 1991; and compares the impact on trading patterns and trade balances for all four countries. Admits that Mercosur has some way to go in establishing a common market and has not increased exports to the rest of the world to the extent expected, but regards it as a qualified success.