• 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 ...

    Developing countries would gain to the tune of $1500bn, which would lift 320m people out of poverty. Two-thirds of the gain from cutting tariffs on industrial goods would go to developing countries; and they would gain a roughly equivalent amount from the abolition of trade-distorting agricultural subsidies in the OECD.

  2. Carbon Credit Trading

    On June 6, 2008, the majority of the U.S. Senate showed support for mandatory climate action through a cap and trade program as they only fell short three votes to invoke cloture on the debate (Cantor, 2006). Having succeeded, they would have proceeded to voting on a specific scheme to substitute the rejected Kyoto Protocol.

  1. Chile: Better of Joining NAFTA or MERCOSUR?

    The 1982 crash, however, did not push Chile to move away from its fundamental goal of trade liberalization and a shrinking state sector. Average tariffs rates were reduced from 26 % in 1985 to 15% in 1988;firms, including state-owned power, telecommunications, steel and insurance companies, as well as the national airlines, were privatized.

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

    Also the fact that a new gym has to be made will cause David Lloyd's to reach deep into their pockets and fork out money so that they could finance the project. But quotas will restrict the number of products that David Lloyd can import, as it will cost them even more and add onto their expenses.

  1. Explain these words/ phrases: Spheres of Influence

    They cannot show favouritism or discrimination. However some exceptions are allowed. For example, countries within a region can set up a free trade agreement that does not apply to goods from outside the group. A free trade agreement is an agreement to trade goods stated in the agreement freely without paying tax to the state.

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

    In addition, resources are used inefficiently, as evidenced by high repetition and dropout rates. Only one-third of the children entering primary school complete the cycle. Girls are particularly at risk in the sector, with female rates of educational participation the lowest in the Western Hemisphere.

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