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Difficulty: MediumInstitutions Developing in a Globalized World

“The Argentine Republic, the Federative Republic of Brazil, the Republic of Paraguay and the Eastern Republic of Uruguay...

Considering that the expansion of their domestic markets, through integration, is a vital prerequisite for accelerating their processes of economic development with social justice...

Convinced that this process must be adapted to scientific and technological developments and to the modernization of their economies, to ensure a competitive position in the world...

Have agreed as follows:
Article 1: The States Parties hereby decide to establish a common market, which shall be in place by 31 December 1994 and which shall be called the ‘Southern Common Market’ (MERCOSUR).”
— Treaty of Asunción, 1991

Based on the passage, the establishment of MERCOSUR is best understood as a response to which of the following late twentieth-century developments?

  1. The growing trend toward regional economic integration to compete in a globalized marketAnswer
  2. B
    A resurgence of mercantilist economic policies designed to limit international trade and achieve national autarky
  3. C
    The expansion of direct colonial rule and territorial annexation by regional powers in the Global South
  4. D
    The complete cultural homogenization of Latin American societies through global communications technology

Answer

The growing trend toward regional economic integration to compete in a globalized market
The correct option is correct because the establishment of MERCOSUR in 1991 directly reflects the late twentieth-century trend of forming regional trade agreements and blocs (such as the European Union and NAFTA) to integrate markets, lower tariffs, and enhance competitiveness in the rapidly globalizing world economy.

Step-by-Step Solution

1
Analyze the stimulus document, identifying the creators (Argentina, Brazil, Paraguay, Uruguay), the action taken (establishing a common market called MERCOSUR), and their stated motives (expanding markets, economic development, ensuring a competitive global position).
The document is a treaty establishing a regional trade bloc in 1991 designed to foster economic cooperation and competitiveness.
This establishes the historical context of late twentieth-century globalization and the rise of regional economic organizations.
2
Evaluate the options against the historical context of Unit 9 (Globalization) and the specific details in the text.
The creation of regional trade agreements like MERCOSUR, the EU, and NAFTA represents a key response of nations seeking to integrate economically to thrive in a globalized world.
This connects the treaty to the broader learning objective of institutions developing in a globalized world.

Key Concept

Regional Trade Blocs and Economic Globalization
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Topics

Institutions Developing in a Globalized World

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