Using resources available, try to find how Mercosur has developed in recent years. South American unity still a distant dream By Richard Lapper For a culturally homogeneous region, South America has found it remarkably difficult to forge a united political and economic identity. On the surface, the creation of a South American Community of Nations does, as its proponents claim, seem to represent something of a ‘historic moment’.

The problem is that the agreement that was to be signed symbolically on Wednesday in Cuzco, Peru – capital of the old Inca empire – is so loose, so long-term and so tangential to most intra-regional trade that it could be overtaken by broader negotiations with the US. At its core, Wednesday’s deal is a merger, over 15 years, of South America’s two existing free trade agreements:

Mercosur, the customs union comprised of Brazil, Argentina, Uruguay and Paraguay, and the Andean Community, made up of Venezuela, Colombia, Peru, Bolivia and Ecuador. Chile, Surinam and Guyana were also expected to sign the deal, which will eventually free tariffs on currently extremely limited intra-regional trade.

The deal also provides for radical improvements in transport, energy connections and other infrastructure designed to allow traditionally Atlantic-orientated countries such as Brazil and Argentina to conduct business more easily with their Pacific-facing neighbours. For now, the union will not have a separate institutional presence, but it could allow South America to take a common stance in international forums. Brazil, by far the biggest Latin American country, would expect its smaller neighbours to adapt to its positions.