Running head: DB FORUM THREE – SOUTH AMERICAN RTA 1 DB FORUM THREE – SOUTH AMERICAN RTA 5 DB Forum Three: South American RTAs Conner Linde BUSI 464-B01 Liberty University Respectfully submitted to Dr. Hammett February 1, 2017 South American RTAs: Long unwelcoming to any form of international trade, the nations of South America are in the process of strengthening the continent’s negotiating position by integrating their economies through trade (Lynch, 2010, pp. 88-89). Though regional and national tensions still exist, the continent has come together by means of two primary trade agreements, MERCOSUR and the Andean Community of Nations (CAN). Though they are unique from one another, these two agreements, together, attract the membership of the majority of the South American nations, yet there are a notable few nations that belong to neither. The distinctions, benefits, and disadvantages of the agreements illustrate well the current standing of South American international trade and consideration of those independent nations is indeed intriguing. MERCOSUR MERCOSUR, with the greater economic weight behind it (Lynch, 2010, p. 87), is currently officially made up of four full member nations and six associate member nations (Lynch, 2010, p. 113). Considered the world’s fourth largest trading bloc, MERCOSUR has incredible potential for making a lasting impact in South America, yet it has not been very sluggish in doing so (Downey, 2014, p. 1178). While MERCOSUR definitely has substantially lowered the trade barriers of its full member nations, it does have ambitious goals of completely lowering trade barriers, further integrating its member nations, becoming a common market (Lynch, 2010 p. 115), and strengthening South America within the global economy and “it has not made substantial progress aligning its policies, thereby hindering its progress” (Downey, 2014, p. 1178). These conflicted agendas have caused MERCOSUR to progress very slowly towards its ambitious goals. Though MERCOSUR has the magnitude of a juggernaut, momentum is still needed to actually accomplish that which it has set out to accomplish. Andean Community of Nations (CAN) Originally intended to become an Andean common market, the Andean Community of Nations (CAN) has become “one of the most institutionalized regional agreements among developing nations” (Lynch, 2010, p. 99). Though integration slowed during the 1970s, CAN has continued to bridge cultural and national divides, resolving disputes and bringing peace to many of its member nations (Lynch, 2010, p. 99). However, CAN’s primary member nations all rely heavily upon agriculture and remain poor, with a high percentage of their populations living in poverty (Morles, 2012). This creates a dependence, first of all, upon the nation’s current agricultural capacity, and secondly, upon imported external goods. This is problematic, however, if each of the primary member nations are experiencing the same needs and none ar ...

1. Running head: DB FORUM THREE – SOUTH AMERICAN
RTA 1
DB FORUM THREE – SOUTH AMERICAN RTA 5
DB Forum Three: South American RTAs
Conner Linde
BUSI 464-B01
Liberty University
Respectfully submitted to Dr. Hammett
February 1, 2017
South American RTAs:
Long unwelcoming to any form of international trade, the
nations of South America are in the process of strengthening the
continent’s negotiating position by integrating their economies
through trade (Lynch, 2010, pp. 88-89). Though regional and
national tensions still exist, the continent has come together by
means of two primary trade agreements, MERCOSUR and the
Andean Community of Nations (CAN). Though they are unique
from one another, these two agreements, together, attract the
membership of the majority of the South American nations, yet
there are a notable few nations that belong to neither. The
distinctions, benefits, and disadvantages of the agreements
illustrate well the current standing of South American

2. international trade and consideration of those independent
nations is indeed intriguing.
MERCOSUR
MERCOSUR, with the greater economic weight behind it
(Lynch, 2010, p. 87), is currently officially made up of four full
member nations and six associate member nations (Lynch, 2010,
p. 113). Considered the world’s fourth largest trading bloc,
MERCOSUR has incredible potential for making a lasting
impact in South America, yet it has not been very sluggish in
doing so (Downey, 2014, p. 1178). While MERCOSUR
definitely has substantially lowered the trade barriers of its full
member nations, it does have ambitious goals of completely
lowering trade barriers, further integrating its member nations,
becoming a common market (Lynch, 2010 p. 115), and
strengthening South America within the global economy and “it
has not made substantial progress aligning its policies, thereby
hindering its progress” (Downey, 2014, p. 1178). These
conflicted agendas have caused MERCOSUR to progress very
slowly towards its ambitious goals. Though MERCOSUR has
the magnitude of a juggernaut, momentum is still needed to
actually accomplish that which it has set out to accomplish.
Andean Community of Nations (CAN)
Originally intended to become an Andean common market, the
Andean Community of Nations (CAN) has become “one of the
most institutionalized regional agreements among developing
nations” (Lynch, 2010, p. 99). Though integration slowed
during the 1970s, CAN has continued to bridge cultural and
national divides, resolving disputes and bringing peace to many
of its member nations (Lynch, 2010, p. 99). However, CAN’s
primary member nations all rely heavily upon agriculture and
remain poor, with a high percentage of their populations living
in poverty (Morles, 2012). This creates a dependence, first of
all, upon the nation’s current agricultural capacity, and
secondly, upon imported external goods. This is problematic,
however, if each of the primary member nations are
experiencing the same needs and none are able to provide it.

3. Additionally, as one of the most institutionalized RTAs, CAN is
incredibly strict when it comes to its member nations adhering
to the policies set forth by the community and enforced by the
Andean Tribunal of Justice (Phelan, 2015). Failure to adhere to
such standards can result in severe discipline including high
tariff sanctions on goods from the noncompliant nation. While
such actions help to maintain the order of the RTA, the
centralized power has caused or aggravated may conflicts within
CAN.
While a large number of South American nations belong to
either MERCOSUR or CAN, there are several that don’t belong
to either. Among these nations are Chile, Guyana, Suriname,
and French Guyana. While these nations obviously have their
own individual histories and reasons for remaining independent
from MERCOSUR and CAN, it is imperative to note that each
of the nations’ reasons can be explained either as a
discontentment with the slow, disjointed, and ineffective
processes of MERCOSUR or the overbearing, centralized,
institutionalism of CAN. Both agreements’ weaknesses provide
unique challenges, causing nations like Chile to avoid such
issues by remaining independent or unattached.
Many Christians have a similar approach to denominations.
It is attractive to some to join a non-denominational church
because, in their opinion, denominations are either too chaotic
and ineffective, changing its stance on issues when influential
individuals persuade them to do so, or because they are too
institutionalized and disciplinarian. Denominations can either
be fluid to the point of chaotic relativism or strict to the point
of exclusion. Those who favor a non-denominational church
may do so because of these weaknesses. Because humans are not
perfect, no church or denomination will ever be perfect, either.
However, Christ desires that those who gather in His name seek
a balance between these two extremes. The Bible teaches that
churches are to appropriately discipline its members (Matthew
18:15-20, 1 Corinthians 5), yet also embrace the unique
distinctions of its members, embracing their gifts, perspectives,

4. and individuality for what they are worth within Christ’s body
and as His child (Galatians 3, 1 Corinthians 12:12-31). Though
this balance is a difficult one to strike, it is one that is worth
striving for, whether it is as a body of believers or as a group of
nations within an RTA.
References
Downey, C. (2014). MERCOSUR: A cautionary tale. The
International Business & Economics Research Journal (Online),
13(5), 1177-n/a. Retrieved from
http://ezproxy.liberty.edu/login?url=http://search.proquest.com.
ezproxy.liberty.edu/docview/1562445077?accountid=12085
Lynch, D. A. (2010). Trade and globalization: An introduction
to regional trade agreements. Lanham, MD: Rowman &
Littlefield.
Morles, G. (2012). CATASTROPHE LURKS IN SOUTH
AMERICA: TAINTED FOOD AND INTERNATIONAL
COMMERCE IN THE ANDEAN COMMUNITY OF NATIONS.
Syracuse Journal of International Law and Commerce, 39(2),
411-439. Retrieved from
http://ezproxy.liberty.edu/login?url=http://search.proquest.com.
ezproxy.liberty.edu/docview/1033048894?accountid=12085
Phelan, W. (2015). Enforcement and escape in the andean
community: Why the andean community of nations is not a
replica of the european union. JCMS: Journal of Common
Market Studies, 53(4), 840-856. doi:10.1111/jcms.12222

5. In 1988, Argentina's and Brazil's government joined into a free
trade agreement that would eventually lead into the
MERCOSUR, which was established in 1991. Members of
MERCOSUR are Brazil, Argentina, Uruguay, Paraguay, and
Venezuela. It's main goal was to create a common market, but
also to establish and incorporate economic and political
agreements. The MERCOSUR is integrated regionally and its
members committed to integrating "their external trade policies
and adopt a common tariff and nontariff barriers on imports
from nonmember nations" (Downey, 2014). Through this, the
countries were hoping to create competitive advantage through
increased efficiencies and taking full advantage of their similar
geographic locations. MERCOSUR also assessed bankruptcy
laws and procedures in order to ensure creditors are prioritized,
and therefore protected. Member nations share a similar culture
and language, that could be a huge advantage in creating
economical growth and strength, especially compared with other
trade blocs. In the beginning, MERCOSUR was economically
successful as "trade between the four members quadrupled"
(Downey, 2014). However, in 1998 and 1999, Brazil suffered an
economic downturn. Because of the interconnectedness the
entire trade bloc suffered. The trade bloc suffered many
disagreements amongst themselves and member countries began
isolating. The only way a bloc with this concept could be
successful is through coordination and unification. For example,
Uruguay and Paraguay prefer decreased barriers, while Brazil
and Argentina want higher tariffs. Due to such circumstances
member countries began developing their own economical
separated paths. For example, Brazil's own direct relationship
with China, through exports, and Cuba, through medical
exchanges, has increased. Some South American countries have
chosen not to join MERCOSUR because the unification issue
and when one country suffers, like in the case of Brazil, the
entire trade bloc suffers.
Some studies suggest the Andean Community of Nations was
designed as a replica of the European Union in an attempt to

6. experiment and compare the framework in another section of the
globe. This trade block started as the Andean Pact in 1969 as a
regional trade agreement between Bolivia, Colombia, Chile,
Ecuador, and Peru. In 1996 it was renamed the Andean
Community. Its economic policy has changed throughout the
years. It began from as an "import substitution system with high
tariffs and restrictions on foreign investment, towards a more
liberal integrationist model" (Phelan, 2015). While the Andean
Community has become liberal, they have struggled to obtain a
common external tariff. They have also attempted tax
harmonization. One of the Andean Community's greatest
strengths is its ability to make joint policy decisions that
address both trade and other policy issues across its member
states. While this is their greatest strength, it also comes with a
lot of politics, which is one of the reasons some South
American countries have chosen not to join.
I believe Christians select to be Non-Denominational versus
Denominational for a few reasons. One, denominational
churches tend to have a negative reputation and feel as it is
hindering their own Christian development, as well as the true
purpose of Christians. Two, there is too much politics and
fighting in denominations. Three, not only is there too much
politics within the denomination, but denominations against
denominations.
References:
Downey, C. (2014). MERCOSUR: A cautionary tale. The
International Business & Economics Research Journal (Online),
13(5), 1177.
Gomez‐Mera, L., & Molinari, A. (2014). Overlapping
institutions, learning, and dispute initiation in regional trade
agreements: Evidence from south america. International Studies
Quarterly, 58(2), 269-281. doi:10.1111/isqu.12135
Phelan, W. (2015). Enforcement and escape in the andean
community: Why the andean community of nations is not a

7. replica of the european union: Enforcement and escape in the
andean community. JCMS: Journal of Common Market Studies,
53(4), 840-856. doi:10.1111/jcms.12222