Mercado Común del Sur/Southern Common Market MERCOSUR, is a major trade bloc of the southern Western Hemisphere. Full members are Argentina, Brazil, Paraguay, and Uruguay. Associate members are Bolivia, Chile, Colombia, Ecuador and Peru. Venezuela was added as a full member in 2005, but the congresses of Brazil and Paraguay have not ratified the action. The organization's purpose is to link economies, promoting free trade toward the goal of regional economic integration. Its constitutive treaty is the Treaty Establishing a Common Market; MERCOSUR's major organs are:
During this period, no new decisions of the Tribunal of Permanent Review (TPR) have been reported on MERCOSUR's official portal. The absence of new activity allows for comments on the role of the TPR and the concept of integration. The TPR was authorized by the Protocol of Olivos[1] (PO), which made changes to improve previous MERCOSUR dispute resolution processes. The PO's stated purpose is to "guarantee the correct interpretation, application and enforcement of the fundamental instruments of the integration process" and MERCOSUR regulations "in a consistent and systematic way."[2] The PO also gives the TPR authority to confirm, modify, or revoke the juridical basis and decisions of the ad hoc arbitral panels,[3] allowing it to enforce discipline with its own previous arbitral decisions.[4] The TPR has issued three orders in connection with the long-running dispute between Argentina and Uruguay about remolded tires.[5] Order 1/05 reflects a TPR focused on establishing the autonomy of the juridical order of MERCOSUR, based on the principle of integration.[6] The TPR response to certain arguments made by Argentina in subsequent phases of the dispute highlights this focus. Orders 1/07 and 1/08 reflect Argentina relying significantly on authorities imported from WTO/GATT to interpret its obligations.[7] This reliance on WTO cases is summarily rejected by the TPR on the basis of the language of integration in Article 1 of the Treaties of Asunción and Montevideo, highlighting the different objectives of MERCOSUR and the WTO. While the role of WTO is to facilitate trade among its members,[8] MERCOSUR's is to establish a community of interests based on much more diverse criteria.[9] Both the authorizing agreements and the context in which the TPR operates, focus on internal efforts of MERCOSUR members to achieve among themselves a set of norms which result in a common market, in distinct contrast to the external focus of the WTO institutions on non-discriminatory trade. A brief history provides background. The first studies of economic integration in Latin America, at the end of the 1940s and early 1950s, envisioned a Latin American common market that would mainly enhance limited national markets with economies of scale while continuing to protect those markets from competition by third countries.[10] Gradually the goals were modified to include two key concepts: external opening of the Latin American parties to each other; and regional integration to facilitate competitive entry into the international economy.[11] The regional integration concept evolved through various trade liberalization agreements, particularly between Brazil and Argentina, during the 1980s. These agreements introduced ideas of gradual harmonization of economic policies and coordination of monetary, fiscal and exchange policies to create a common market. The process culminated in the general and automatic integration scheme in the Treaty of Asunción, signed by Argentina, Brazil, Paraguay, and Uruguay on 26 March 1991. It provided for the creation of a common market among the four participants, incorporating the various concepts, as reflected in Article 1: This common market shall involve:As noted above, the chapeau of the PO further emphasizes integration as a fundamental goal of MERCOSUR. Article 34 of the PO directs the TPR to take into account the foundational agreements of MERCOSUR and actions of its institutions as well as public international law in settling disputes.[12] This article does not support Argentina's attempts to incorporate WTO cases into TPR decision-making. Not only is the WTO a contractual arrangement, but the TPR has interpreted the applicability of international legal principles to its decision-making as strictly subsidiary or complementary, and only to be used at all when applicable to the case at hand.[13] Further, qualifying regional trade agreements (RTA) such as MERCOSUR are recognized as exceptions to the WTO/GATT general proscription on trade discrimination, under the Enabling Clause. MERCOSUR, along with others, has been notified as an RTA by the WTO[14] under the Enabling Clause[15] Thus, general WTO jurisprudence based on non-discrimination in trade is not applicable to disputes among MERCOSUR members concerning the process of opening their economies to each other. The TPR actions demonstrate its commitment both to ensuring continuity of decisions and adherence to the structure of the MERCOSUR institutions. The unique object and purpose of the MERCOSUR agreements distinguish TPR consideration of a dispute from that of a body operating under the aegis of WTO or another international agreement, even if the facts presented are identical; thus the insistence of the TPR on its autonomy of decision-making. Robin Blackwood U.S. Navy JAG Corps Commander (Ret.) August 2009 Footnotes: 1 Protocol of Olivos for the Settlement of Disputes (18 February 2002) 42 ILM 2, available in English at http://untreaty.un.org/unts/144078_158780/5/7/13152.pdf and in Spanish at http://www.mercosur.int/msweb/portal%20intermediario/es/index.htm. 2 The Preamble of the Protocol of Olivos states: [The Parties,] Aware that the progress made in the process of integration within Mercosur makes it necessary to improve the system for the settlement of disputes; Considering the need to guarantee the correct interpretation, application and enforcement of the fundamental instruments of the process of integration and the regulations of Mercosur, in a consistent and systematic way; Convinced that it is convenient to make specific modifications to the system for the settlement of disputes in order to strengthen juridical security within Mercosur. .. 3 Protocol of Olivos, Article 22. 4 See Thomas Andrew O'Keefe, Dispute Resolution in MERCOSUR, 3 J. WORLD INVEST. 507 ( 2002). 5 Laudo No. 1/2005, Laudo del Tribunal Permanente de Revisión Constituido para Entender en el Recurso de Revisión Presentado por la República Oriental del Uruguay contra el Laudo Arbitral del Tribunal Arbitral Ad Hoc de fecha 25 de Octubre de 2005 en la Controversia "Prohibición de Importación de Neumáticos Remoldeados Procedentes del Uruguay", 20 December 2005 [hereinafter, Order 1/05], available in Spanish at http://www.mercosur.int/msweb/portal%20intermediario/ES/controversias/arquivos/TPR_Laudo001-2005_Importacion%20de%20Neumaticos%20Remoldeados.pdf; Laudo No. 01/2007, Laudo del Tribunal Permanente de Revisión constituido para entender en la solicitud de pronunciamiento sobre exceso en la aplicación de medidas compensatorias - Controversia entre Uruguay y Argentina sobre prohibición de importación de neumáticos Remoldeados procedentes del Uruguay, 8 June 2007 [hereinafter, Order 1/07], available in Spanish at http://www.mercosur.int/msweb/portal%20intermediario/ES/documentos/TPR%20Laudo%2001%20-%2007.pdf;. Laudo No. 1/2008, Laudo del Tribunal Permanente de Revisión en el asunto N°1/2008 "Divergencia sobre el cumplimiento del Laudo N°1/05 iniciada por la República Oriental del Uruguay (art. 30 Protocolo de Olivos)" 25 April 2008 [hereinafter Order 1/08], available in Spanish at http://www.mercosur.int/msweb/portal%20intermediario/ES/controversias/LAUDO%20N_1%20DE2008.pdf 6 See Order 1/05, ¶ 9. 7 Argentina argued for the use of WTO authorities under the principles of Art 31-34 of the Vienna Convention on the Law of Treaties (23 May 1969) 1155 U.N.T.S. 331. (see Laudo 1/07 ¶ 3.1.9-3.1.14). However, the WTO authorities do not appear to fit the Vienna Convention criteria for use. 8 Order 1/07, ¶ 7.1. 9 Order 1/07, ¶ 7.2. 10 Eliane B. Bucar, MERCOSUR - AN EVALUATION: A BRAZILIAN POINT OF VIEW, Institute of Brazilian Business and Public Management Issues, George Washington University (1997), available at http://www.gwu.edu/~ibi/minerva/Fall1997/Eliane.Bucar.html. 11 Id. 12 Article 34 lists: Treaty of Asunción; Protocol of Ouro Preto; Protocols and agreements executed within the Treaty of Asunción framework; Decisions of the Common Market Council; Resolutions of the Common Market Group; Instructions of the Mercosur Trade Committee; and applicable principles and provisions of International Law 13 Order 1/05, ¶ 9. 14 See the World Trade Organization Regional Trade Agreements Information System, available at http://rtais.wto.org/UI/PublicMaintainRTAHome.aspx. 15 Decision of the Contracting Parties, Differential and more favorable treatment, reciprocity and fuller participation of developing countries, L/4903 (28 November 1979) GATT B.I.S.D. (26th Supp.) at 203 (1979), the "Enabling Clause", provides such arrangements
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