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Argentina, Brazil, Paraguay, Uruguay, and Venezuela created the Southern Community Market (MERCOSUR) treaty March 26, 1991. MERCOSUR is the most important international project of agreements found among these countries.

MERCOSUR members share common values in regards to:

  • Democratic and pluralists societies
  • Defenders of fundamental freedoms, human rights, environmental protection, and sustainable development
  • Agreements of democratic consolidation, judicial security, economic development, and a fight against poverty and social inequality

The objective of the agreement is:

  • To create a free circulation of goods and services
  • To establish a common external tax
  • To adopt a common political market
  • To coordinate political macroeconomics sectors and harmonize legislation
  • To strengthen the integration between the countries

Argentina (top)

Since 2002, Argentina has had the most growth in Purchasing Power Parity (PPP) among Brazil, Chile, and Mexico. The growth is predicted to continue through year 2010 .

Argentina is the second largest country in Latin America and occupies most of the southern portion of the American continent. Its total area is about 1,068,300 square miles (about the size of the U.S. east of the Mississippi River). Argentina is bordered by five countries - Chile to the east, Bolivia and Paraguay to the north, and Brazil and Uruguay to the northeast .

In Argentina, farmers benefit from a favorable climate, fertile soils and the large investments farmers in new technologies and techniques. Cattle ranching has been a main economic base for the residents of the plains (Pampas) for over 200 years. Nearly all of the cattle raised and slaughtered in Argentina are consumed domestically .

Cheap credit drives a boom in consumer spending. Favorable global commodity prices and the emergence of Asia as a key export destination have increased earnings from primary and agro-industrial exports.

Tourism is traditionally a big earner of foreign exchange. It provides employment for approximately 10.1% of the work force and presently accounts for about 8.5% of GDP .

Brazil (top)

The country is a member of Mercosur, the trade bloc consisting of Brazil, Argentina, Paraguay and Uruguay.

Brazil, the largest country in South America, occupies some two-thirds of the continent's entire Atlantic coast . It is bordered by Argentina, Bolivia, Colombia, French Guiana, Guyana, Paraguay, Peru, Suriname, Uruguay and Venezuela.

By 2020, 41.2% of the country's population will be under the age of 25. This is good news for beauty manufacturers as consumers in this age group are far more likely to experiment with new personal care products than their elders. By 2013, Brazil's beauty and personal care market will be worth over US$36 billion .

Between the 1970’s and 1980’s there was a rapid increase in births. With the majority of the Brazilian population currently under age 40, there is an increasing demand for items such as housing, home appliances, home improvements.

Brazil has one of the largest populations in the world with over 194 million people in 2008. This provides a large labor pool. Presently, Brazil's large and relatively skilled population is making it an attractive investment destination, with technology and skills transfer building up its domestic human capital.

Brazil has an abundance of mineral deposits such as bauxite, iron ore, manganese, chrome, lead, zinc, tungsten and nickel. Most importantly, Brazil is the largest producer of high grade iron-ore in the world and it is the country's largest export product, accounting for 5% of the total value of mineral exports. Brazilian company Companhia Vale do Rio Doce (CVRD) is the world’s largest iron ore exporter and its largest producer.

Brazil has a vibrant agricultural sector, driven by increases in both productivity and in cultivated area. The country presently has 152 million acres under cultivation but the government claims that this can easily be more than doubled. Brazil produces 40% of the sugar traded on world markets and output is increasing by nearly 20% per year. Brazil is also the world's top producer of orange juice and coffee, and ranks second in world production of soy and meat (beef and poultry) and third for fruits and corn. Altogether, agro-business accounts for over a quarter of total GDP .

Investors plan to spend more than US$12 billion over the next five years to erect and expand ethanol plants. The government believes it can increase ethanol production from the annual level of about 18 billion liters today to close to 200 billion liters by 2025. Producers have invested heavily in expanding ethanol capacity.

Brazil's industrial base is one of the largest and most diversified of any emerging economy. The country's big manufacturers include producers of automobiles, consumer electronics, computers and software, and heavy industries. Today, the country is the world's fourth largest carmaker.

Brazil has 12.6 billion barrels of oil, the second largest oil reserves in South America. Proven crude oil reserves have increased significantly following a number of oil discoveries offshore in the Campos Basin. Oil production has also risen steadily in recent years. As a result, Brazil is expected to become an oil exporter in the near future . The government-owned oil company, Petrobras, plans to spend US$39 billion on exploration and production upgrades through 2011.

Paraguay (top)

The country is a member of Mercosur, the trade bloc consisting of Brazil, Argentina, Paraguay and Uruguay. Paraguay presently has one of the strongest fiscal positions of any economy in Latin America and one of the lowest levels of public debt.

Agricultural activities represent at least one-quarter of all economic activity and account for almost all exports. Soy makes up 75% of agricultural exports and makes Paraguay the world's fourth largest exporter of soybeans .

The country has vast hydroelectric resources, including the world's largest hydroelectric generation facility, which is built and operated jointly with Brazil (Itaipú Dam).

Uruguay (top)

The country has an agreement for trade and investment with the US. The agreement could be a precursor for a full-fledged free-trade deal however this is still under discussion .

A free trade agreement with Mexico has been implemented and further trade reform measures are under negotiation, including reductions in tariffs on capital goods for equipment and telecommunications, information technology and agricultural inputs from 6-9% to 2%, effective through 2011 . Additionally, the authorities will continue to phase out a number of specific import duties on textiles, foodstuffs and chemical products.

The government has followed a broad policy known as “neo-liberalism”. This approach was distinguished by modest efforts to privatize state-owned enterprises and the pursuit of free trade with the US.

Natural gas is likely to play a growing role in the future. The government wants this energy source to make up 30% of total usage. The most recent development was the successful opening of the first phase of the Southern Cross pipeline that cost between US$160 million and US$170 million. The pipeline will be capable of carrying up to five million cubic meters per day .

Venezuela (top)

Venezuela is a member of Mercosur, the trade bloc consisting of Brazil, Argentina, Paraguay and Uruguay.

It is a member of the Organization of Petroleum Exporting Countries (OPEC), which secures an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital to those investing in the petroleum industry.

The petroleum sector dominates Venezuela's mixed economy, accounting for roughly a third of GDP, around 80% of exports, and more than half of government revenues. Venezuela contains some of the largest oil and natural gas reserves in the world .

Venezuela has 99.4 billion barrels of proven oil reserves, which is the largest in South America. Due to the maturity of many oil fields and their declining productivity, the state-owned oil company wants to boost its spending to increase production at existing oil wells, as well as to develop new non-conventional extra heavy crude oil and natural gas resources .

Venezuela's birth rate is among the highest in South America, after Bolivia, Paraguay and French Guyana. Venezuela is also among the most urbanized countries in Latin America, which makes it attractive to foreign penetration.

Euromonitor International