n Latin American Report - The reasons for Mercosur's rejection of the FTAA : research article




The Free Trade Area of the Americas (FTAA) initiative has been vehemently opposed by civil society in Argentina and Brazil. Among the many points of contention is the reluctance of the United States of America (US) to address the important matter of tariff peaks (which would involve the US protectionist anti-dumping legislation). Regarding normal tariff reduction, Mercosur's CET is relatively high and a considerable reduction would result in trade distortion in favour of US products, a reduction of trade within the region, and the alienation of traditional trade partners, for example, the EU which also represents the majority of foreign direct investments in Mercosur. Furthermore, there has been no progress in the US regarding the reduction of agricultural subsidies, which amount to 115 per cent of effective production. The areas of services and investments are also problematic, with apparent distortions. The same applies to government procurement. From a legal perspective the FTAA would be in violation of international law, as codified by the Vienna Convention on the Law of Treaties.


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