World Bank Says Mercosur Pact ‘Not Under Fire’

A reported World Bank study criticizing the Mercosur free-trade pact obscures the more important evolution of South American nations toward freer trade and openness to foreign investment, analysts and business executives said Wednesday.

The World Bank sought to play down the significance of a leaked internal study that said the Mercosur group--Brazil, Argentina, Paraguay and Uruguay--protected inefficient industries in those countries and discouraged imports.

“Mercosur is not under fire,” said World Bank spokesman Mario del Carril. He said bank officials had encouraged foreign investors to take advantage of the growing market that will result from the continuing expansion of Mercosur, which was formed Jan. 1, 1995. “It might not be bad to get on the train.”

Chile became an associate member of Mercosur on Oct. 1, and Bolivia will also join, though no date has been set.

“Mercosur is exactly where the European Community was in the 1960s” when it was focusing on removing trade barriers among its original six members, said Gary Hufbauer, a senior fellow at the Institute for International Economics in Washington. Now the EC has 15 members and low external trade barriers.