Trade blocs are intergovernmental agreements intended to bring economic benefits to their members by reducing barriers to trade.
Some well known trade blocs include the European Union, NAFTA and the African Union. Through encouraging foreign direct investment, increasing competition, and boosting exports, trade blocs can have numerous benefits for their members.
In Latin America, Mercosur and the more recently formed Pacific Alliance blocs together represent about 93 percent of the region's GDP at 2014 market prices. Who participates in these trade blocs and how do they compare?
Size, membership and performance of Mercosur and The Pacific Alliance
The Pacific Alliance is a Latin American trade bloc formed in 2011 among Chile, Colombia, Mexico, and Peru. Together the four countries have a combined population of about 221.3 million and GDP of $2.1 trillion. The Southern Common Market (Mercosur) created in 1991, includes Argentina, Brazil, Paraguay, Uruguay, and Venezuela. Together the five Mercosur countries have 285.0 million inhabitants and GDP of $3.5 trillion.
One of the areas intended to benefit from these agreements, trade within the blocs, accounts for about 4 percent of the Pacific Alliance's total trade and about 14 percent in Mercosur.