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This chapter looks at the role of Rules of Origin in the implementation of Preferential Trade Agreements (PTAs) in the southern cone region of Latin America. It considers the (imperfect) Custom Union (CU) of Mercosur and the Free Trade Agreements (FTAs) signed between Mercosur and Chile, and Mercosur and Bolivia. These PTAs allow the study of the potential contrast in the design of ROOs under CU and FTA. The following key questions are addressed: Was there any significant difference in the design of ROOs under CU and FTAs? Were the latter more restrictive? To what extent did normative vis-à-vis political economy considerations play any role in the determination of ROOs in the Southern Cone?

The central argument is that US power, once established as predominant in the hemisphere, has been nothing short of decisive in the founding, nature, and functioning of the regional multilateral institutions/organizations in the Americas in which it has taken part. The examples of the Pan American Union (PAU) Organization of American States (OAS) and of the North American Free Trade Agreement (NAFTA) are used to show this state of affairs in play; the most attention is paid to the OAS because of the lessons that can be derived from the very long history of US membership of this organization. In another case, that of Mercado Comun del Sur (Mercosur, or the Common Market of the South), it is shown how, even where the US is not a member of a multilateral organization in the hemisphere, its weight is still felt in terms of the aims and behaviour of that body. At the same time, it is seen that such organizations may on occasion be useful for the smaller states in restraining to at least some extent US behaviour, although in general such a restraining role is reserved for moments when US vital interests tend not to be involved and where Latin American, or more recently Canadian, actions to limit US unilateralism do not negatively affect goals perceived to be key by Washington. The first section gives an overview of the US and the hemisphere over the more than two centuries of its diplomatic and related action therein, the next looks at the specific experience of the PAU and the OAS, and the following two at NAFTA and Mercosur.

Until 1991, Argentina experienced rising immigration from border countries to fulfill a segmented demand for labour within specific sectors; but structural economic change had negative consequences for employment, as the number of jobs in construction, industry, and services contracted. Given the narrowing of employment options and the shrinking of Argentine employment, it is not clear what will happen to immigration from border countries, but the data presented here suggest that the concentration of border workers will increase in construction and services and that within these sectors they will be employed on increasingly unfavourable terms.

This chapter argues that dollarization should not be debated in the abstract, assuming that the advantages are the same everywhere. Policy should differ in accordance with different circumstances. It urges Mercosur to consider the establishment of its own monetary union, rather than for its members to adopt the currency of another country that is unwilling to share its monetary sovereignty.

This chapter examines the pros and cons of macroeconomic policy coordination in Mercosur. It reviews the macroeconomic functioning of the Argentine economy under convertibility, and the exchange regimes and trade structure of Mercosur countries. It argues that Mercosur countries would greatly benefit from gradually advancing into macro coordination. The first step is to reduce the remaining volatility in the evolution of nominal and relative prices within the bloc.

This chapter examines international judicial cooperation instruments in force in Latin America. It sheds light on how international treaties have influenced the rules on recognition and enforcement of foreign decisions in the regional instruments adopted within Mercosur, particularly the Las Leñas Protocol.

This chapter examines the evolution of the parliamentary dimension in Mercosur, from its modest beginnings with the Joint Parliamentary Commission to the establishment of the consultative Mercosur Parliament (Parlasur) in 2005. The context for the establishment and empowerment of an international parliamentary institution was favourable in Mercosur. Specifically, the chapter argues that the organization’s initial parliamentarization reflects the combination of international diffusion from the EU and the democratization of member states, while the transition to Parlasur is best explained by a combination of diffusion from the European Union and the financial crisis in the region that occurred around the turn of the century.

Edward Mansfield examines the establishment, institutional design, political economy, and economic and political effects of the North American Free Trade Agreement (NAFTA) and Mercosur. Both agreements have met with some success, but face continuing challenges. NAFTA confronts various agricultural, illegal immigration, and environmental issues that have strained relations among the member states. For its part, Mercosur has few mechanisms for institutionalization, and any further expansion will be difficult if new states have different policy preferences. Both agreements feature one particularly large country, and smaller participants have bridled at the tendency for these regional hegemons to discount the interests of other member states. However, the experiences of NAFTA and Mercosur suggest that preferential trade agreements help to defuse conflicts and stabilize political relations among members and illustrate how preferential trade agreements can be used to foster economic and political reform in participating countries and limit the ability of states to roll back reforms.

This chapter considers the geopolitical factors now threatening the Andean Community and explains how the Andean Tribunal of Justice (ATJ) has responded to this crisis. It also explains why the ATJ's intellectual property (IP) island continues to thrive even as threats to the larger integration project loom larger. It then returns to the Ecuador noncompliance dispute, introduced in Chapter 6, and considers how developments in the Andean integration process may affect the influence and power of the ATJ going forward. Divisions in the Andean Community, together with the pull of competing regional projects such as Mercosur and UNASUR — a merger of the Andean Community and Mercosur — have impeded the longstanding goal of creating an Andean common market and led to significantly reduced government support for the Andean integration project as a whole. This chapter thus attempts to understand what happened to the ATJ's authority during this crisis.

This chapter compares the foundations of the Central American Court of Justice (CACJ) and the Caribbean Court of Justice (CCJ) with those of the Andean Tribunal of Justice (ATJ) and of the Mercosur Permanent Review Court (PRC). The goal is to provide general considerations related to the actors and factors that may be deemed of central importance for founding regional courts, and to confirm the value of the approach taken in this book. Similar to those of the CACJ and CCJ, the foundations of the ATJ and of the Mercosur PRC also extended over relatively long periods of time and were finally unlocked by the occurrence of events that were only partially and indirectly related to the two Courts. Against this background, the chapter draws general theoretical conclusions on the foundations of Regional Economic Courts (RECs) in Latin American and the Caribbean.

This chapter compares the authority of the Central American Court of Justice (CACJ) and the Caribbean Court of Justice (CCJ) with that of the Andean Tribunal of Justice (ATJ) and the Mercosur Permanent Review Court (PRC) and, in so doing, draws general conclusions about the actors and factors that may be deemed of importance for better understanding the de facto authority of the Latin American and Caribbean Regional Economic Courts (RECs). More specifically, it shows that, similar to the CCJ, the ATJ has been relatively successful in achieving authority, at least in the area of intellectual property (IP) law. This occurred thanks to the Court’s ability to develop a relationship with state and sub-state actors, such as administrative agencies and national judges, which repeatedly filed preliminary rulings on these topics, thus allowing the Court to make a difference in this area of law. The chapter also shows the fluctuations of the authority of the ATJ on classic matters of community law, such as removal of trade barriers and the implementation of the policies of the Andean Community. In contrast, the Mercosur PRC has struggled throughout its history to ensure that it receives a steady flow of cases to rule upon and has been repeatedly criticised by both state and sub-state actors. This final chapter shows that this reality is a symptom of political instability, lack of commitment to regional institutions, authoritarian politics, and struggle to complete the transition to democracy in the Mercosur Member States. Against this background, the chapter draws general theoretical conclusions on the authority of the four RECs in Latin American and the Caribbean.