What Mercosur is and how it works

The basin came first

Five governments signed the Treaty of the River Plate Basin at Brasília on 23 April 1969: Argentina, Bolivia, Brazil, Paraguay and Uruguay. They undertook to study and develop the Paraguay, the Paraná and the Uruguay together, and the works that followed were built in pairs instead. Brazil and Paraguay signed the Itaipú treaty on 26 April 1973, Argentina and Paraguay the Yacyretá treaty in December of the same year, and the question of how far a dam upstream could be allowed to change the river for the country downstream took the three governments until October 1979 to settle.

The political opening came later and came from two of them. Argentina and Brazil signed the Declaration of Iguazú on 30 November 1985 and the Treaty of Integration, Cooperation and Development on 29 November 1988, and Paraguay and Uruguay were brought into the arrangement three years after that.

What was signed at Asunción

The treaty is short and its first article is the whole ambition: a common market in place by 31 December 1994, involving the free movement of goods, services and factors of production, a common external tariff and a common trade policy toward third states, the coordination of macroeconomic and sectoral policies, and the harmonisation of legislation. Annex I carried the instrument that did the work in the meantime, a programme of automatic linear tariff cuts on a fixed timetable, with a schedule of exceptions lodged by each signatory. Article 17 makes Spanish and Portuguese the official languages, and the official version of a working document is the one in the language of the country hosting the meeting. Article 19 makes the Government of Paraguay the depositary, so every instrument of ratification since has gone to Asunción.

The deadline passed and the structure was built around it

The Protocol of Ouro Preto, signed on 17 December 1994, gave the group legal personality under international law and the organs it still runs on: the Council of the Common Market, the Common Market Group, the Trade Commission and an administrative secretariat at Montevideo. The common external tariff took effect on 1 January 1995, and the lists of exceptions to it have been renewed ever since.

Two articles of that protocol account for most of what has happened afterwards. Article 37 has the organs decide by consensus and in the presence of all the states parties, which means any one of them can stop anything and none of them can be outvoted. Article 40 sets out how a decision takes effect: each state incorporates it into its own legal order and notifies the secretariat, the secretariat notifies the states once all four have done so, and the norm enters into force in all of them together thirty days later. A decision of the Council binds nobody until every member has written it into its own law. There is no direct effect and no supranational court. The Protocol of Olivos, concluded on 18 February 2002, sends disputes to ad hoc tribunals and to a Permanent Review Tribunal, and lets a complainant take the same dispute to the World Trade Organization instead, the choice of one forum closing the other.

What accession costs

Article 20 of the treaty admits only members of the Latin American Integration Association, and lets their applications be considered once the treaty has been in force for five years. The waiting period is lifted for an applicant that belongs to no other subregional integration scheme, which is a condition Bolivia has never met: it has been in the Andean Community throughout.

Venezuela signed an accession protocol on 4 July 2006 and it took six years to come into force. The Paraguayan congress removed President Fernando Lugo from office on 22 June 2012; the other three states parties applied the Ushuaia Protocol and suspended Paraguay a week later, and admitted Venezuela while that suspension ran, in August 2012. Paraguay ratified the accession itself the following year.

Bolivia's protocol was signed in July 2015, replacing a text of 2012 that Paraguay had not been present to sign. It waited on ratifications until the Brazilian congress approved it in 2023, and the Bolivian law completing it was promulgated on 5 July 2024. The accession runs on a four-year term to take on the common external tariff and the accumulated body of decisions, which is the same arrangement Venezuela failed to complete.

The democratic clause, and what it does

The Protocol of Ushuaia was signed on 24 July 1998 by the four states parties together with Bolivia and Chile, and it makes the full operation of democratic institutions a condition of the integration process. Article 5 scales the response from suspending a state's right to take part in the organs up to suspending the rights and obligations that flow from membership. Article 6 has the measure adopted by consensus among the others, communicated to the state concerned, which takes no part in the decision, and in force from the moment of that communication.

Venezuela was suspended twice on separate grounds. The first measure, on 1 December 2016, followed its failure to incorporate the body of rules its accession protocol required. The second, on 5 August 2017, was taken under the Ushuaia Protocol, and the Uruguayan foreign ministry records it as a suspension in all the rights and obligations inherent in the condition of a state party, under the second paragraph of article 5. Neither measure had been lifted as of 2 September 2026.

Negotiating as one

Decision 32/00, adopted at Buenos Aires on 29 June 2000, reaffirmed that the states parties would negotiate trade agreements with third countries jointly, and barred them from 30 June 2001 from signing new preferential agreements, or granting new preferences inside existing ones, that the group had not negotiated. The same decision instructed them to reopen talks with the Andean Community and with Mexico and to conclude by 31 December 2001, failing which the preferences already in place could be kept only until 30 June 2003.

That rule is what the negotiation with Europe has been conducted under. Talks opened in 1999, concluded politically at Montevideo on 6 December 2024, and produced two instruments signed at Asunción on 17 January 2026: a partnership agreement requiring ratification by every European Union member state, and an interim trade agreement between the Union and Argentina, Brazil, Paraguay and Uruguay, which has applied provisionally since 1 May 2026.

Money, and which way it runs

The one common fund is small and its arithmetic is deliberate. Decision 18/05 set the annual contribution to the Structural Convergence Fund at 100 million United States dollars, divided by the historical average of each economy: Brazil 70%, Argentina 27%, Uruguay 2%, Paraguay 1%. The same decision distributes the money for projects the other way about: 48% to projects presented by Paraguay, 32% to Uruguay, and 10% each to Argentina and Brazil.

Where the membership is argued

Mercosur's own instruments name states parties and nothing else. The category of associated state was built afterwards out of trade agreements, and it covers the South American countries that hold tariff preferences and attend meetings without being bound by the treaty: Chile, Colombia, Ecuador, Guyana, Peru and Suriname. Published lists add Mexico and New Zealand as observers, a status neither the treaty nor the Protocol of Ouro Preto creates, and Mexico's link to the group has been an agreement of the kind Decision 32/00 asked for rather than the treaty.

The roster on this page is assembled from what each country record carries, and it files Mexico under the group. The instruments file Mexico outside it. Both readings are in print, the table below counts the roster, and neither reading is settled here.

Guaraní sits in a similar position. The Council incorporated it as one of the languages of the group by Decision 35/06 in 2006, and the working languages named in article 17 of the treaty and article 46 of the Protocol of Ouro Preto are still Spanish and Portuguese, which would take an amendment of both texts to change.