The Legalization of Dispute Resolution in Mercosur

Abstract

The Southern Common Market (Mercosur), the world's fourth-largest trading bloc, represents an intriguing yet under-researched case of a regional organization which has made significant advances in regional integration in the past decades, legalization being a central dimension of its integration process. In 2002, Mercosur's dispute settlement system was substantially revised by its four member states. Up until then, disputes among member states had been resolved by diplomatic negotiations and ad hoc tribunals with limited independence from the member-state governments. The reforms mark a significant advance in the legalization of this regional organization: a standing court with a more independent judiciary and improved access to the court's jurisdiction was established. In order to account for the shift towards more legalization of Mercosur, this article presents a rational institutionalist explanation and develops hypotheses about states’ preferred levels of legalization (why), an account of the “timing” of qualitative shifts in legalization (when), and the institutional form that legalization decisions take (how).