Mercosur: Integration and Industrial Policy

Comprising the majority of Latin America's population, land and economic output, the Southern Cone Common Market (Mercosur) represents the deepest attempt to date at economic integration in the region. Two tentative conclusions emerge from an analysis of Mercosur and its industrial policy: 1. the short-run welfare effects of Mercosur are likely to be small but positive, and 2. industrial policy to date has not been very large but its future application must be judicious if Mercosur's goals are to be met. The objectives and effects of Mercosur are presented. The Mercosur countries' industrial policies in the general framework of Mercosur are discussed and analyzed.