ABSTRACT
Trading partnerships designed to link comparative advantages among and between smaller economies in Latin America have met with varying degrees of success. The Central American nations, with relatively similar export patterns and products, developed a political structure in 1951 known as the Organization of Central American States. This structure formed the basis for the General Treaty on Central American Economic Integration, better known as the CACM, or Central American Common Market. During the early 1960s, the CACM was extremely effective as a means of stimulating trade and growth in the region. The 1991 war between Ecuador and Peru, and current border tensions between Venezuela and Colombia, have hardly facilitated trade negotiations. MERCOSUR is a trading bloc established on January 1, 1995, between Argentina, Brazil, Paraguay, and Uruguay. Other Latin American trading blocs include the CARICOM, or the Caribbean Common Market, consisting of many of the small states in and around the Caribbean basin.
