Mercosur

Representatives of Argentina, Brazil and Chile at the Niagara Falls Peace Conference, where they mediated the Mexican revolutionary affair at the request of the United States, advocating the rise of the ABC countries, a political and economic pact among these three nations in 1915.[7]

For five centuries South America has been the scene of some of the most violent battles in the Americas. Since the arrival of the Spanish and Portuguese to the continent, the La Plata Basin has been the scene of Luso-Spanish disputes over territory (the territory that today is Uruguay, was once Spanish, then Portuguese, again Spanish and Brazilian). However, at the same time, in this region there are fundamental chapters of the political and economic emancipation of future Mercosur members.[8]

During the 16th and 17th centuries, Spain organized the commercial system of its colonies around the "fleets and galleons" scheme, authorizing only certain ports the right to send or receive goods originating from these colonies. For cities like Buenos Aires, founded in 1580, this system threatened the region's economic development. To face this economic confinement, the population of Buenos Aires saw the only possible way out: the commercial exchange (albeit illegally) with Brazil. This was the beginning of a relationship destined to grow.

In the 19th century, the process of political emancipation in South America accentuated the contrasts between the countries of the region. During this period, important chapters in the history of Brazil, Argentina, Paraguay and Uruguay occurred. It is enough to mention the Cisplatine War, the independence of the Republic of Uruguay, the Uruguayan Great War, the Ragamuffin War, the dispute between unitaries and federalists in Argentina and the Paraguayan War: alliances, interventions and conflicts that forged the historical context of formation of the La Plata nation-states.

In 1941, in the middle of the Second World War, Brazil and Argentina for the first time tried to create a Customs Union between their economies. However, this did not happen due to the countries' diplomatic differences in relation to Axis policies, after the attack on Pearl Harbor. With the end of the war, the need for interaction between nations became imminent and, consequently, economic blocs formed. In Latin America, however, there was no union that obtained satisfactory results.

Headquarters of Mercosur, Montevideo, Uruguay.

In December 1985, Brazilian President José Sarney and Argentine President Raúl Alfonsín signed the Iguaçu Declaration, the basis for economic integration of the so-called Southern Cone. Both countries had just come out of a dictatorial period and were facing the need to redirect their economies to the outside and globalized world.[9]

Both countries had contracted a large external debt during the period of the military governments and did not enjoy credit abroad. There was a great need for investment in the countries, but no money. This common situation made them both realize the mutual need. Shortly after the signing of the Iguaçu Declaration in February 1986, Argentina declared its intention of a "preferential association" with Brazil. In a private home in Don Torcuato, there was a meeting to discuss the matter. The discussion, lasting two days, took place in an atmosphere of exchanging ideas and stating positions regarding the status of the area's economy.

After a few weeks, Brazil invited Argentina to a similar meeting, in Itaipava, also in a private residence. This signaled acceptance of the Argentine initiative and the formation of an agreement, with the objective of promoting the economic development of both countries and integrating them into the world. Out of this meeting came the Argentina-Brazil Integration and Economics Cooperation Program or PICE (Portuguese: Programa de Integração e Cooperação Econômica Argentina-Brasil, Spanish: Programa de Integración y Cooperación Económica Argentina-Brasil).[10] Protocol Number 20 of the program proposed the Gaucho as a currency for regional trade.[11] For many, the idea of integration in South America seemed more like an abstraction, owing to various unsuccessful experiences in the past. However, this was perceived as different.[12]

On 6 July 1990, the President of Brazil, Fernando Collor, and the President of Argentina, Carlos Menem, signed the Buenos Aires Act[13] aimed at total customs integration between the two countries. It was decided that all measures for the construction of the customs union should be completed by 31 December 1994.[14] To ensure compliance with the deadlines, the Binational Working Group was created, the body whose responsibility was to define methods for creating the common market between the two nations. In September, the governments of Paraguay and Uruguay showed a strong interest in the regional integration process, leading to the full perception by the signatories that a more comprehensive treaty was needed.[15]

First lifting headquarters of Mercosur in Montevideo (2001).

Mercosur was finally established in 1991 by the Treaty of Asunción, based on the Buenos Aires Act, the Treaty of Asunción defined rules and conditions for the creation of a free trade zone among its four signatories. Likewise, it was decided that all measures for the construction of the common market should be completed by 31 December 1994 with the amendment of the Treaty of Ouro Preto.[16] In 2001, celebrating the 10th anniversary of the bloc's creation, the Mercosur flag was hoisted for the first time at Mercosur's headquarters in Montevideo.

The main implications of this free trade zone are:

• The free movement of goods, services and productive factors between countries, through the elimination of customs duties and non-tariff restrictions on the movement of goods and any other measure to the same effect, with the establishment of a common external tariff and the adoption of a common commercial policy towards third countries or economic blocs;
• Products originating in the territory of a signatory country will have, in another signatory country, the same treatment applied to products of national origin;
• The coordination of foreign trade, agricultural, industrial, fiscal, monetary, foreign exchange and capital policies, of others that are agreed, in order to ensure adequate conditions of competition between members, with the commitment of these countries to harmonize their legislation, especially in areas of general importance, to strengthen the integration process;
• In relations with non-signatory countries, members of the bloc will ensure equal conditions of trade. In this way, they will apply their national laws to inhibit imports whose prices are influenced by subsidies, dumping or any other unfair practice. At the same time, the bloc's countries will coordinate their respective national policies in order to develop common rules on trade competition.

It was defined that during the transition period, the signatory countries would adopt a general regime of origin, a system for resolving disputes and safeguard clauses. To ensure order and compliance with deadlines, two institutional bodies were created:

• Common Market Group: a body formed by four full members and four alternate members from each country, from the respective Ministry of Foreign Affairs, Ministry of Economy and Central Bank. Until the creation of the Arbitral Tribunals, the Common Market Group was the main authority in resolving disputes;
• Common Market Council: the institution with the highest authority in the treaty, created to manage political decisions and ensure compliance with established deadlines.

The Treaty of Asunción also decided that the accession of a new member, in order to be effective, must be approved by legislative decree in all signatory countries. Otherwise, the membership process will be invalid.

The founding of the Mercosur Parliament was agreed upon at the December 2004 presidential summit. Up to 2010 it was planned to have 18 representatives from each country, regardless of population.[17]

Former President of Brazil Dilma Rousseff hosting the President of Venezuela Nicolás Maduro during the XLVIII Mercosur meeting.

Venezuela's history in Mercosur began on 16 December 2003, during a Mercosur summit held in Montevideo, when the Mercosur Economic Complementation Agreement with Colombia, Ecuador and Venezuela was signed. This agreement established a timetable for the creation of a free trade zone among the signatory states and the full members of Mercosur, with a gradual reduction in tariffs. In this way, these countries were successful in negotiations for the formation of a free trade zone with Mercosur, since an economic complementation agreement, with full compliance with its schedule, is the item required for the rise of a new associate. However, on 8 July 2004, Venezuela was elevated to associate member status, without even completing the schedule agreed with the Common Market Council.[18][19][20] The following year, the bloc recognized it as an associated nation in the process of accession, which in practice meant that the state had a voice, but not a vote.

The Caribbean country's Accession Protocol was signed in 2006 by all presidents of countries in the bloc. Subsequently, the Uruguayan and Argentine congresses approved the entry of the new member. The Brazilian congress did so only in December 2009. However, the Paraguayan congress did not approve it and, therefore, made it impossible for the Caribbean nation to fully join. Subsequently, on 29 June 2012, in response to Fernando Lugo's summary dismissal of the presidency, the Mercosur presidents decreed the Paraguayan suspension until the next presidential election, in April 2013. A month later, the bloc presidents acknowledged their adhesion of Venezuela and several trade agreements have been signed. It was suggested that the decision could be reversed with the Paraguayan return by exercising its veto power, which was not the case.[21] The decision was the subject of controversy. For some economists, Venezuela's acceptance as a full member of Mercosur expands the bloc's economic importance and opens up new business and investment opportunities. However, for others, the decision was seen as hasty, imposed by the governments of Brazil and Argentina and motivated purely by political interests.

Bolivian representative speaking to the Mercosur members.

Mercosur members gathered at the Consultative Council for the Civil Society. Observe the absence of the Venezuelan flag among that of the union's full member-states.

On 7 December 2012, Bolivian President Evo Morales signed a protocol aimed at accession to full membership in the bloc.[22] Such a proposal requires review and possible legislative approval.[23] On 7 July 2015, the heads of Mercosur having decided to accept Bolivia's request to become a full member country, Bolivian president Evo Morales signed the Brasilia protocol. This allowed Bolivia full membership in Mercosur.[24]

In August 2016, the presidents of Brazil, Argentina, and Paraguay, while present in Rio de Janeiro for the Olympic Games, met to discuss suspending Venezuela from Mercosur. The three countries were in doubt about whether Venezuela was complying with the union's requirements for full membership, citing human rights violations among other issues.[25] In fact, Venezuela was rejected from assuming the presidency of Mercosur by those three countries, prompting a dispute that continued to the end of the year.

On 21 November 2016, Paraguayan Foreign Minister Eladio Loizaga announced that Venezuela would be suspended in December 2016 after the nation was given a three-month period to reform its laws to abide to Mercosur requirements, with Mercosur noting that "rules governing trade, politics, democracy and human rights" needed to be overhauled in Venezuela.[26] On 1 December 2016, Venezuela was suspended from Mercosur.[27]

On 5 August 2017, the foreign ministers of Argentina, Paraguay, Uruguay and Brazil affirmed that Venezuela's membership in Mercosur is suspended indefinitely in response to the "rupture of the democratic order" in that country following the 30 July 2017 Constituent Assembly elections. The bloc by-laws have no provision for expulsion. However, trade and migration policies stay without changes to avoid aggravating the social crisis.[28] Brazilian Foreign Minister Aloysio Nunes said that Venezuela will remain suspended until the country "re-establishes democracy."[29]

In January 2019, the opposition-majority National Assembly declared incumbent Nicolás Maduro's 2018 reelection invalid, entering a presidential crisis.[30] During a July 2019 summit in Santa Fe, Argentina, the bloc called for "free, fair and transparent presidential elections, as soon as possible" in Venezuela. The presidents of the four member countries signed a statement expressing concern "for the grave crisis that Venezuela is going through, which is seriously affecting the humanitarian situation and human rights."[31]

Mercosur has a population of 284 million among its full member states. The region has several areas of sparse demographics such as tropical forests and deserts, but it is also highly urbanized with the presence of two alpha cities – São Paulo and Buenos Aires – and several beta cities such as Montevideo, Rio de Janeiro, Brasilia, etc. The population is diverse, comprising people of European, Africans and Indigenous descent. People of Afro-Latin American descent tend to be concentrated in Brazil and Uruguay, with a smaller, but historic Afro-Argentine community in Argentina and an emerging population in Chile, the latter largely of Haitian origin. There is a high percentage of mestizos that vary greatly in composition by place. There is also a smaller population of Asians, notably in Brazil. The white population forms a majority in Argentina and Uruguay and represents about 45 percent in Brazil. Mestizos form the majority population in Paraguay, making it distinct from its immediate neighbors.[1] Almost all Mercosur nations have significant indigenous American populations, especially in Paraguay (Guaraní is a national language in the country along with Spanish, and almost all Paraguayans have Guaraní genetic ancestry), Argentina (especially in the Northwest and Southwest of The country), Brazil (in the Northern and Northwest Amazonian states of the nation, where Native American tribes have vast reservation lands).

Portuguese, Spanish and Guarani are the three official languages of the Mercosur, as they are the official languages of the five full members – Portuguese is the official language of Brazil, Spanish is the official language of all other full member countries, while Paraguay also have Guarani as a co-official language. Along with Paraguay (where it is one of two official languages), parts of Argentina (notably Corrientes) speak Guaraní. However, the Mercosur does not provide all, or even most, services in Guaraní. The official website and almost all official summits are only held in Spanish and Portuguese. Important documents, such as legislation, are translated into Portuguese and Spanish.

Currently, among the full members, Portuguese is the most spoken language, with over 210 million native speakers as of 2019, while Spanish accounts for 83 million speakers approximately. Even though language policy is the responsibility of member states, Mercosur institutions promote multilingualism among its citizens, and while Brazil has enforced Spanish as a foreign language to be taught at school, Argentina and Venezuela have done so with Portuguese. Although Portuguese is the most spoken language by the bloc's population, Spanish is the more used language on internal affairs, as it is an official language to most members.

The council is the highest-level agency of Mercosur with the authority to conduct its policy, and responsibility for compliance with the objects and time frames set forth in the Asuncion Treaty. The council is composed of the Ministers of Foreign Affairs and the Economy (or the equivalent) of all five countries. Member states preside over the Council in rotating alphabetical order, for six-month periods. Meetings: Council members shall meet whenever necessary, but at least once a year. The presidents of the member nations shall partake of the annual Common Market Council meeting whenever possible. Decision Making: Council decisions shall be made by consensus, with representation of all member states.

Mercosur reunion in Cordoba, 2006.

The Group is the executive body of Mercosur, and is coordinated by the Ministries of Foreign Affairs of the member states. Its basic duties are to cause compliance with the Asuncion Treaty and to take resolutions required for implementation of the decisions made by the council. Furthermore, it can initiate practical measures for trade opening, coordination of macroeconomic policies, and negotiation of agreements with nonmember states and international agencies, participating when need be in resolution of controversies under Mercosur. It has the authority to organize, coordinate and supervise Work Subgroups and to call special meetings to deal with issues of interest. Composition: The Common Market Group shall be made up of four permanent members and four alternates from each member state, representing the following public agencies: (i) the Ministry of Foreign Affairs; (ii) the Ministry of Economy, or the equivalent (from industry, foreign affairs and/or economic coordination); and (iii) the Central Bank. The members of the Common Market Group appointed by a given member state will constitute the National Section of the Common Market Group for that particular nation. Meetings: The Common Market Group will meet ordinarily at least once every quarter in the member states, in rotating alphabetical order. Special meetings may be freely called at any time, at any previously scheduled place. The meetings will be coordinated by the Head of the Delegation of the host member state. Decision Making: Common Market Group decisions shall be made by consensus, with the representation of all member states. The official Mercosur languages will be Portuguese and Spanish, and the official version of all work papers will be prepared in the language of the country hosting the meeting.

The Administrative Office will keep documents and issue the Mercosur official bulletin in both Portuguese and Spanish, and will also be charged with communicating the activities of the Common Market Group so as to allow for the maximum disclosure of decisions and the relevant documentation. The Socioeconomic Advisory Forum is consultative by nature, and represents the various socioeconomic sectors of the member nations.

Directly subordinated to the Common Market Group, the Work Subgroups draw up the minutes of the decisions to submit for the consideration of the council, and conduct studies on specific Mercosur concerns. The work subgroups are the following: commercial matters; customs matters; technical standards; tax and monetary policies relating to trade; land transport; sea transport; industrial and technology policies; agricultural policy; energy policy; coordination of macroeconomic policies; and labor, employment and social security matters. meetings. The meetings of the Work subgroups will be held quarterly, alternating in every member state, in alphabetical order, or at the Common Market Group Administrative Office. Activities will be carried out by the Work Subgroups in two stages: preparatory and conclusive. In the preparatory stage, the members of the Work Subgroups may request the participation of representatives from the private sector of each member state. The decision-making stage is reserved exclusively for official representatives of the member states. The delegations of representatives from the private sector in the preparatory stage of the Work Subgroup activities will have a maximum of three representatives for each member state directly involved in any of the stages of the production, distribution or consumption process for the products that fall within the scope of the subgroup's activities.

Presidents of Mercosur at 2019 summit, Santa Fe, Argentina.

The Committee will have both an advisory and decision-making nature; with powers to submit proposals as well. It will be competent, inter alia, to: follow up on the integration process and keep the respective Congresses informed; Take the necessary steps for the future instatement of a Mercosur Parliament; Organize subcommittees to examine matters relating to the integration process; Submit its recommendations to the Common Market Council and Group as to how the integration process should be conducted and Southern Common Market formed; Make the adjustments necessary to harmonize the laws of the different member states and submit them to the respective Congresses; Establish relationships with private entities in each of the member states, as well as international agencies and bureaus so as to obtain information and specialized assistance with matters of interest: Establish relationships targeting cooperation with Congresses of the nonmember nations and entities involved in regional integration schemes; Subscribe to cooperation and technical assistance accords with public and/or private entities whether domestic, supranational or international. The committee will be composed of a maximum of 64 acting parliamentary members, 16 per member state, and an equal number of alternates, appointed by the Congress to which they pertain, and with a term of office of at least two years. The meetings shall be conducted by a directors' board consisting of four presidents (one for each member state). The committee will ordinarily meet twice a year, and extraordinarily whenever summoned by any of its five presidents. Meetings are held in the territory of each member state on a successive and alternating basis. Decision Making: Meetings of the Joint Parliamentary Committee will only be valid when attended by parliamentary delegations from all member states. Decisions by the Joint Parliamentary Committee will be made by consensus vote of the majority of the members accredited by the respective Congresses of each member state. Portuguese and Spanish are the official languages of the Joint Parliamentary Committee.

São Paulo Stock Exchange, the largest of Latin America.

The Trade Commission will assist the Mercosur executive body, always striving to apply the instruments of common trade policy agreed to by the member states for operation of the customs unification. The commission should also follow up on the development of issues and matters related to common trade policies, the intra-Mercosur trade and trade with other countries. The commission will have five actual members and four alternates, with each member nation's indicating a member. The Trade Commission shall exert every effort to apply common trade policy instruments such as: trade agreements with other countries or international entities; administrative/commercial product lists; final adaptation system for Mercosur customs unification; origin system; free-trade zone system, special customs areas and export processing zones; system to discourage unfair trade practices; elimination and harmonization of tariff restrictions; nonmember country safeguard systems; customs coordination and harmonization; consumer protection systems; and export incentive harmonization.

Furthermore, the trade commission should speak out regarding the issues raised by the member states regarding application and compliance with common offshore tariffs and other common trade policy instruments. The commission shall meet at least once a month, as well as whenever asked to by the Mercosur executive agency or by a member state. The commission can take decisions entailing administration and application of trade policies adopted under Southern Common Market, and whenever necessary submit proposals to the executive body regarding regulation of the areas under its authority; additionally, it can propose new guidelines or modify those in existence in Mercosur trade and customs matters. In this respect, the trade commission can propose a change in the import duty on specific items under common external tariffs, including cases referring to development of new Mercosur production activities. To better achieve its objectives, the trade commission can create technical committees targeting direction and supervision of the work it engages in. It can also adopt internal operating regulations. Proposals and decisions of the trade commission will be taken by a consensus of the representatives indicated by each member nation. Any disputes ensuing from the application, interpretation or compliance with the acts issued by the trade commission are referred to the Mercosur executive body, and should be resolved using the directives set forth in the Dispute Resolution System adopted under Southern Common Market.

Courts in member nations to whose jurisdiction the contracted parties have agreed to submit the matter in writing will have jurisdiction to settle controversies stemming from civil or commercial international contracts.

The SABIA-Mar, scheduled to launch in 2023, is a Brazilian/Argentine earth observation satellite.[44]

The jurisdiction can be agreed on at the time the contract is signed, during the life of the contract, or even when the dispute actually arises. The validity and effects of the choice of venue will be governed by the law of the member nations that normally have jurisdiction to hear the case, always resorting to the law most favorable to the validity of the contract. Whether or not jurisdiction is chosen, such jurisdiction will be prorogated in favor of the courts of the member state where the proceedings are in fact filed, provided the respondent voluntarily allows this in an affirmative and unfeigned way.

Mercosur Permanent Tribunal of Revision

Should the contracted parties not agree on courts competent to settle disputes, the member state chosen by the plaintiff of the case has jurisdiction—the court of the place where the contract is to be performed, the court of the domicile of the respondent, or the court of the domicile, or headquarters of the claimant when the latter can show that it has done its part. For purposes of item (i) above the place of performance of the contract is the member state where the obligations on which the claim is based have been or should be performed, taking into consideration the following: For contracts involving certain specific items, the place where they existed at the time of contract signing; For contracts involving specific items according to their type, the place of domicile of the debtor at the time of contract signing; For contracts involving fungible items, the place of domicile of the debtor at the time of conclusion of the contract; and For service rendering contracts:

• If in regard to items, this the place where they were at the time of contract signing.
• If effectiveness is related to any special place, this is the place where they were to produce effects.
• In all other cases, this is the place of domicile of the debtor at the time of contract signing. For purposes of application of second item above for determination of the domicile of the respondent in a contractual dispute involving individuals, the following will be taken into consideration: The habitual residence: On a subsidiary basis, the central place of business; and In the absence of any such considerations, the place where found, meaning the actual residence. When dealing with a legal entity, the determination of the domicile will be based on where the administrative headquarters have been set up. The claim plaintiff can, as an alternative, file in any of the places where the legal entity has branches, establishments, agencies or any other type of representation. Legal entities headquartered in any member state that have concluded contracts with any other member state can be sued in the courts of this latter state should there be any dispute as to the construction and implementation of the obligations regulated by contract. In the event there is a codefendant, a suit on contractual matters can be adjudicated with the courts of jurisdiction in the territory of the domicile of any of the parties to the litigation. Additionally, any claims entailing personal collateral rights or intervention of nonmember states in contractual obligations can be filed with the court hearing the main proceeding.

In the event of there being a counterclaim based on any act or fact that served as the basis for the main proceeding, the courts hearing the main proceeding will be competent to hear any counterclaims that may arise.

A regional technical commission harmonizes mechanisms for accreditation across member nations, and resolves any situation not be covered by the equivalency table. This commission includes delegations from the ministries of education of each member nation, and meets whenever at least two member states think it necessary. Meeting sites are established on a rotating basis. Any disputes among member states as a result of application, construction, or noncompliance regarding provisions related to education are initially resolved by direct diplomatic negotiations. Should the countries not reach an accord or only partially resolve the dispute, they resort to procedures set out in the dispute resolution system. Should the member nations enter into a bilateral convention or accord with provisions more favorable to their students, the member states in question can apply whichever provisions they consider most advantageous.

The member states can assess merchandise from these areas with the common external tariff used for Mercosur merchandise, or, in the case of certain special products, the domestic tariff prevailing in each individual state. In this way, the products from the free-trade zones can have the more favorable tax treatment established under Southern Common Market, given to the merchandise produced in the normal customs zones of each member state or, in the case of certain special products, can have the normal customs treatment prevailing in each nation. Products coming from outside of Mercosur are highly taxed so that local companies do not feel the need to compete with large international companies.

Products produced or marketed in the free-trade zones of each member nation will be eligible for the safeguard system whenever this entails an increase not provided for in imports, but capable of causing damages or threatened damages to the importer country.

In the event of the producing nation's granting special incentives for production from the free-trade zones that are not compatible with the corresponding guidelines established under the General Agreement on Tariffs and Trade (GATT), the member nation can make any adjustments needed to return the situation to equilibrium.

The member nations agreed that any free-trade zones that in August 1994 were already in operation could operate normally under Mercosur, along with any that are set up in light of legal guidelines prevailing or in course in congress during this same time period. This means that a member nation can no longer create new free-trade zones that are more privileged. Mercosur is an effective agreement for its members.

The actual implementation of Mercosur will not affect the special Manaus, Brazil, and Tierra del Fuego, Argentina, free-trade zones organized in light of their special geographic situations. These two free-trade zones may continue normal operations until 2013.

For the purposes of constructing the Colonia Protocol, investors are considered to be: Individuals who are citizens of any of the member nations or that reside there on a permanent basis or are domiciled there, with due regard for legislation prevailing in such territory; Legal entities organized pursuant to the legislation of one of the member nations that are headquartered there; and Legal entities organized in the territory where the investment is made, actually and directly or indirectly controlled by the legal entities or individuals mentioned above.

The term investment includes all types of assets such as: movable or immovable property, such as rights in rem and guarantee in rem rights; shares, corporate holdings and any other type of corporate participation; credit instruments and rights that may have an economic value; intellectual property rights or materials, Including copyrights and industrial property rights such as patents, industrial drawings, trademarks, commercial names, technical procedures, know-how and goodwill; Economic concessions involving public law, such as research, cultivation, extraction or natural resource exploration concessions.

Brazil–Uruguay international border

The nation receiving the investment cannot avail itself of unjustified or discriminatory means capable of restricting the investor's freedom to manage, maintain, use, enjoy and dispose of its investments.

The member states are not however obligated to extend to investors in the other nations signatory to the Colonia Protocol the benefits of any treatment, preference or privilege resulting from international accords relating fully or partially to tax matters.

In addition, the member nations can temporarily establish a list of exceptions where the new treatment will not yet prevail.

Landmark of the Three Borders – Argentina, Brazil, and Paraguay, in Foz do Iguaçu.

In this way, the various member nations decided to except the following economic sectors:

• Argentina: ownership of real estate on the frontier strip, air transportation, naval industry, nuclear power plants, uranium mining, insurance and fishery;
• Brazil: mineral prospecting and mining; use of hydraulic energy; health care; television and radio broadcasting and telecommunications in general, acquisition or leasing of rural properties; participation in the financial intermediation, insurance, social security and capitalization systems; chartering and cabotage as well as inland navigation;
• Paraguay: ownership of real property on the frontier strip; communications, including radio and television broadcasting; air, sea and land transportation; electricity, water and telephone services; prospecting for hydrocarbons and strategic minerals; import and refining of petroleum derivatives and postal services;
• Uruguay: electricity; hydrocarbons; basic petrochemicals, atomic energy; prospecting for strategic minerals; financial intermediation; railways, telecommunications; radio broadcasting; press and audiovisual means.

The member nations undertook to do nothing to nationalize or expropriate investments in their territories that pertain to investors from the signatory countries, unless such measures are taken based on public need. In such case, nothing discriminatory can be done, but everything must be implemented by due legal process. Compensation for the investment holder that is expropriated or nationalized should be both adequate and effective, and made in advance, based on the real investment value determined at the time the decision is publicly announced by the proper authorities. This payment will be updated until actual payment, and the affected investor will receive interest.

The original member state investors will be ensured free transfer of their investments and any earnings thereon. These transfers can be made in freely convertible currency, using the exchange rate prevailing on the market pursuant to the procedures established by the member state receiving the investment. Member nations cannot adopt any exchange measures restricting free transfer of the funds invested or from activities exercised in their respective territories.