• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Chile - Almost a member of the Mercosur Club

Extracts from this document...

Introduction

Shawn Abrahim Internal Assessment- Economics Coursework Chile - Almost a member of the Mercosur Club GDP is a popular measure that gauges the total amount of goods and services produced in a country annually. Chile is enormously dependant on trade, which makes up approximately 87% of its GDP. The economic benefits of joining Mercosur would be outstanding. Mercosur is a customs market comprised of Brazil, Uruguay, Paraguay and Argentina. It is the third largest trading bloc in the world with a market of $1.1trillion (U.S) and 220 million consumers. Members of a customs market have no trade barriers, such as tariffs, amongst themselves. ...read more.

Middle

Joining Mercosur will give Chile the negotiating power to trade with other large trading bloc's such as the EU. This will help increase Chile's volume of trade and lower trade barriers they face across the world. With increased trade, all parties involved will benefit. Chile will further specialize in the products that they have a competitive advantage (Lowest opportunity cost associated with production) in and they will be able to operate more efficiently. They will trade goods that they can efficiently produce for goods that they cannot produce resourcefully. There are people who feel more trade is negative. ...read more.

Conclusion

This makes Chile an attractive trading partner due to the ease with which foreign products can enter Chile. While common trade policies for nonmembers usually mean lower tariffs for most countries, Chile would have to increase its tariffs to keep inline with the rest of Mercosur. This would make Chile less popular as a trading partner for non-Mercosur members. (See figure A) Chile must decide if the benefits of increased influence in the international market, combined with increased trade with Mercosur members, will outweigh the problems created if domestic tariffs against non-members are raised. 443 words Source: Rachel Holmes, (November 1 2000) Almost a member of the Mercosur club http://www.ecountries.com/the_americas/chile/news/1403231 ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level UK, European & Global Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level UK, European & Global Economics essays

  1. Where does the World Trade Organisation fit in the overall scheme of international public ...

    The Farm Bill reverses the brief liberalising trend in US agriculture in the 1990s and dramatically increases domestic subsidies, with potentially grave trade-distorting effects. The massive tariffs imposed to "safeguard" (i.e. protect) inefficient US steel producers have been almost as damaging, particularly in souring US-EU relations and distracting the attention

  2. International Trade - I have been asked to investigate the possibility of a company ...

    job this will create Lloyds to be in the hands of good intermediaries as they will try their best to gather customers for them and by them being experienced it will help create Lloyds as one of the strong competitors and the will announce there arrival in China.

  1. Carbon Credit Trading

    Cap standards on different types of emissions create scarcity of carbon credits. Thus, as under the European Union Emissions Trading System, members that reduce emissions beyond their targets have surplus carbon credits which they can to sell on the market or bank for liquid assets.

  2. Chile: Better of Joining NAFTA or MERCOSUR?

    To avoid the collapse of the financial sector, the banking industry was nationalized in 1983. Tariff levels were raised to 35% to stimulate the manufacturing sector (Patrick, J. Michael, "Chile: The Right Partner for NAFTA?" Trade Insights, No.9 Austin, TX: Center for the Study of Western Hemispheric Trade, September 1996).

  1. Emergency Economic Recovery Program From the United Nations International Report, Vol. I, no. A1

    To subscribe, e-mail <irep@echonyc.com> Fax US: (212) 463-9441 US plan for economic recovery depends heavily on private sector reactivation By Matthew Creelman, in Chronicle of Latin American Economic Affairs, Vol. 10, no. 18, 4 May 1995 In late March, US Deputy Secretary of State Strobe Talbott led a delegation of

  2. Explain these words/ phrases: Spheres of Influence

    Alliances therefore is not about ideology but of simple common sense, they would continually shift to maintain the balance of power. Then a balance will be maintained to prevent wars. Balance of power politics was a factor why the U.S.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work