Helping Them In Order to Help Itself: The Capacity of Brazilian Regional Power in the Development of Mercosur.

Do larger trade partners incur a larger share of the cost associated with establishing or perpetuating free trade arrangements? A key assumption found in many free trade theories states that larger trade partners are willing to incur disproportionate costs because of benefits specialized to their needs. In addition, their larger size gives them the greater capability to take on these costs. Therefore, they help their partners in establishing a free trade area in order for them to help themselves achieve greater benefits from free trade. The implication is that successful economic integration requires a regional preponderant power that acts as a core provider of public goods. However, this is just an assumption, one that has not seen the light of empirical testing. I propose to test this by using the case of the Common Market of the South (Mercosur). By utilizing macroeconomic data and findings from elite interviews with key Brazilian institutional actors (gathered during fieldwork in Brasília in May-July 2003), we can support the argument that Brazil has acted as a regional leader during crisis points (e.g. Argentinean peso crisis), within its capability, in order to maintain the process of integration in the Southern Cone. [ABSTRACT FROM AUTHOR]