The Deep Roots of Protectionism in the Southern Cone: Constituent Interests and Mercosur’s Common External Tariff

Abstract

AbstractThis article examines the influence of subnational economic interests on the formation of supranational trade policy in the Southern Common Market (Mercosur). Accounting for differences in the relative importance of member countries, the article argues that subnational economic interests influenced the structure of Mercosur’s common external tariff (CET). Although the CET was negotiated without direct input from voters or legislators, its structure reflects the interests of geographically specific economic interests in the member countries. The results of a regression analysis of tariffs toward nonmembers indicate that the economic composition of subnational political jurisdictions shaped the structure of the CET. These findings suggest that by overlooking subnational economic interests, much of the current literature on the evolution of Mercosur misses a critical aspect of the policymaking process.