Mercosur is a full customs union encompassing Argentina, Brasil, Paraguay y Uruguay.
On Tuesday, the 31st of July, Venezuela joined that group making it one of the largest economies in the world at an estimated $3.3 trillion dollars.
Recently, a similar economic agreement made up of largely western countries (Mexico, Chile, Peru and Colombia) named the “Alianza del Pacífico” has provided a regional counterweight to the 17 year old Mercosur. Alianza del Pacífico represents roughly 75% of the total population encompassed by Mercosur.
Mercosur is also burdened by struggling members such as Argentina which is currently experiencing stagflation.
Venezuela’s economy has also been devastated by 12 years of Chavez’s leftist policies. Despite being oil rich, his nationalizations, and totalitarian economic policies have driven away investment, and the country appears to be struggling to increase production in one of it’s few productive areas. Inflation was an estimated %27 in 2011.
By contrast, Alianza del Pacífico is constituted of countries which trend far nearer to free market models, and the results reflect this reality. Growth for Chile in 2011 was an estimated %6, %5.9 in Colombia, %3.9 in Mexico, and %6.9 in Peru. Those numbers are even more impressive when considering the general state of the world economy. By contrast, the US saw a growth rate of %1.7. The UK was treading water at a paltry %0.7 in the UK.
Ecuador is currently also considering an invitation to Mercosur.