There are several political and economic communities which have united to benefit from a single market and from the power of the community. Amongst the most important are the North American trade bloc NAFTA and the European Union. On May 23, the twelve South American countries signed the Constitutive Treaty of the UNASUR, the Union of South American Nations. The UNASUR is aimed at uniting two existing custom unions in South America, creating a single market, infrastructure and energy cooperation as well as an improved extraction of raw materials and coordinated economic and defence policies. Another major project is the planned introduction of a single currency in the long term. The UNASUR has a population of 388 million and the annual GDP is close to $2 trillion.
If Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana, Paraguay, Peru, Suriname, Uruguay and Venezuela manage to unite and work together, they’re likely to become a strong global power, but there are fundamental differences and tensions between the member states. The economically powerful Chile supports the idea of free trade and low customs while other countries like Venezuela are making moves of protectionism and nationalization. Then there are considerable tensions between states like Columbia which has a good relationship with the United States and Venezuela which has in contrast quite a tense relationship with the US. Another issue is the crisis between Colombia, Ecuador and Venezuela after the Ecuadorian cross-border raid on Ecuadorian territory in March. On the economic side, there are steep differences in wealth and the economic situation across the countries. The divergent growth and inflation rates are a major hindrance towards a single currency. Most South American countries still trade in dollars with each other.
On the other hand, the UNASUR states don’t face the challenge of extreme linguistic diversity as the EU does. The two major languages across the continent are Spanish and Portuguese. The European Union has to spend more than €1,100 million on translating annually.