Max Planck Society

Max Planck Institute for Comparative and International Private Law

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Dr. Denise Wiedemann




History of the Latin America Unit

The Latin America Unit claims a long tradition. Originally a component of the Spain Unit, it was established as an independent division in 1971 by Jürgen Samtleben after his return from post-graduate studies at the Universidade de São Paulo. The development of the Unit was linked to a systematic development of the library holdings on Latin American law, a collection that continues to attract domestic and international scholars to the Institute, including scholars from Latin America. Samtleben dedicated his efforts primarily to a scientific examination of the private international law of Latin America, and he was deeply involved with the historic inception of the Mercosur. A selection of his most important research articles was published in a 2010 anthology.

In 2004, Jan Peter Schmidt succeeded Jürgen Samtleben as the head of the Unit. Schmidt’s efforts focused on the private law tradition of Latin American countries as well as the influence of preceding European models. His 2009 dissertation on civil law codification in Brazil was an in-depth examination of the across-the-board 2002 reform of the Brazil Civil Code; his work represents the first comprehensive German-language study of the topic. From 2011 forward Schmidt authored a number of different studies on succession law, family law and contract law in Latin American countries.

From 2012 to 2014, Tilman Quarch led the Latin America Unit. Focal points of his research included Brazilian patent law and investment protection law; additionally, he participated in the updating (from a comparative law perspective) of the primary work of Brazilian jurist Pontes de Miranda.

After a transitional phase overseen by Anton Geier in 2015/2016, the Latin America Unit has since 2017 been in the hands of Denise Wiedemann.

Civil Law in Latin America

Although it is difficult to reduce a culturally and socio-economically diverse region such as Latin America to a single common denominator, certain commonalities nevertheless exist so as to allow a meaningful academic treatment of all Latin American countries. In addition to the shared Iberian heritage in respect of language and culture, this includes above all the legal roots shared by today’s Latin American jurisdictions.
Whereas the colonial legislation in Brazil and in the Spanish viceroyalties was to a great extent a homogenous derivative of the legislation in place in the principal Iberian cities, the New World countries quickly chose their own paths upon attaining independence. Carried by the pervasive 19th-century notion of codification, exceptional jurists such as Bello in Chile, Vélez Sarsfield in Argentinia and Teixeira de Freitas and Bevilaqua in Brazil drafted comprehensive and technically advanced civil codes. While the corresponding Códigos linked themselves on the one hand to their Iberian legacy, they were at the same time highly influenced by the contemporary European models, these including especially the French Code civil but also the work of German Pandekten scholars. Of particular significance, furthermore, were the early regional attempts at harmonisation, which later continued in regional groupings such as the Andean Community and the Mercosur.

The significance of comparative law in the Latin American realm is demonstrated by the fact that – much like the first Latin American civil codes – the civil law revisions undertaken or planned in recent years (especially in Brazil and Argentina) are the products of a substantial comparative consideration of European civil codes. While the influence of the European legal systems is also reflected in the area of civil procedure, the growing influence of (primarily North American) common law is prominent in the areas of commercial law, company law and securities law. Fields such as competition law are by and large US legal transplants, whose practical legal implementation, however, has thus far varied considerably from what is set down in the statutory text. This, in turn, highlights the need to pay special attention to practical legal realities in researching Latin American law. 

The Law of the Mercosur

Led by Prof. Dr. Basedow and Dr. Samtleben, the Institute project "Wirtschaftsrecht des MERCOSUR" (Economic Law of the Mercosur) began in April 1999 and was financially supported by the Volkswagen Foundation. Central topics of the research project were competitive law, commercial arbitration, injunctive remedies and transportation law. The working group created in the course of the project has since that time completed its efforts (Work of the MERCOSUR Project). The topic, however, remains an object of Institute research and is thus being further explored within the Latin America Unit.

The “Common Market of the South” (in Spanish “Mercado Común del Sur”; in Portuguese “Mercado Comun do Sul”, thus the acronyms MERCOSUR and MERCOSUL) is a cooperative effort of South American countries with the aim of creating a free trade zone and customs union. The MERCOSUR presently comprises five full members and five associate members. In 1991 in Asunción, Argentina, Brazil, Paraguay and Uruguay concluded the founding treaty. On 4 July 2006, Venezuela signed the accession agreement, and in 2012, amid considerable tumult, it was accepted as the fifth full member. Bolivia, Chile, Ecuador, Columbia and Peru are associated countries that enjoy privileged market access and strive for full accession in the mid- to long-term. At the governmental level, the full membership of Bolivia has already been agreed to in an accession agreement. The ratification of the agreement by the parliaments of all the member states, however, is still in progress. Similarly, the association agreements concluded in 2015 by Guyana and Surinam still require parliamentary approval of the full members.
The MERCOSUR has steadily developed, both internally and in respect of its external relations. Only a few years after its establishment, the entry into force of the Ouro Preto Protocol in 1995 resulted in an institutional restructuring and the “birth” of the MERCOSUR as an independent entity under public international law. As such, in 1995 it concluded an interregional framework agreement with the EC that institutionalized the dialogue between the two economic blocks and formed the basis for bilateral efforts toward increased economic and commercial cooperation. This agreement entered into force on 1 July 1999. Since 2010 the EU and the MERCOSUR have been negotiating a free trade agreement. At present there already exist limited tariff and free trade agreements with India (2003), Israel (2007), Egypt (2010) and Palestine (2011).
Today, MERCOSUR can still only be understood as a programmatic title given that it currently does not constitute a common market, instead being only an incomplete tariff union. Although the 1995 agreement established customs-free trade between members and common external tariffs in principal, a number of exceptions are still in place. While other market freedoms such as the free movement of goods were similarly pronounced in the founding agreement, they have been implemented only in part thus far. And though the MERCOSUR organs – composed of government representatives – have been quite active in legislating common rules, their implementation is subject to a complicated procedure. An illustration in this regard is offered by the two protocols on investment protection which were unable to attain ratification.
Nevertheless the economic union developed in quite a promising fashion in the first eight years after its inception, and trade between the member states grew significantly. The tide turned, however, at the start of 1999 with the devaluation of the Brazilian currency. The intra-regional export of “expensive” Argentinian products collapsed, whereas Argentina found itself confronted with a large influx of “cheap” Brazilian goods. The turbulences in the balance of trade inside the block were accompanied by a political and economic crisis in Argentina that culminated in Argentinian national bankruptcy in 2001.
The then predicted collapse of the MERCOSUR or its absorption into the pan-American free trade zone (ALCA/FTAA), however, did not occur. In this regard, an important role was played by dispute resolution mechanisms which had been put into place through the MERCOSUR, particularly ad-hoc arbitral proceedings. Further, the Olivos Protocol (2002) saw the establishment of the Permanent Appeals Court, a body which in 2005 issued its first arbitral ruling and which in 2007 authored its first pronouncement on the interpretation of MERCOSUR law. In both cases the Court looked heavily to the jurisprudence of the CJEU and to academic literature on Community law. The originally purely administrative secretariat was staffed with specialists on the law of integration and now counsels other MERCOSUR organs on questions of substantive legal integration. Finally, in May 2007 the MERCOSUR parliament was inaugurated with the aim of ensuring the democratic participation of all segments of the population in regards to the process of integration. However, consistent with the inter-governmental structure of the MERCOSUR, the parliament does not yet exercise any co-determinative powers.
In recent years, significant conflicts between the member states have flared. A prominent example is the attempt by Argentina to prevent the construction by Uruguay of two paper mills on their shared border along the Uruguay River. The project, of considerable economic importance for Uruguay, was seen by Argentina as running afoul of both the existing border treaty and environmental law provisions. Although the crisis was defused to a certain extent with the 20 April 2010 ruling of the International Court of Justice in the Hague, urging both parties to pursue a negotiated settlement, it has continued to burden the relationship between the two countries.
Additionally, two decisions were reached on 29 June 2012 at the Mendoza Summit that would have a lasting impact on the structure of the MERCOSUR, namely the admittance of Venezuela as a full member and the suspension of Paraguay’s membership. The latter was a result of the procedurally problematic manner in which Paraguayan president Fernando Lugo was removed from office, this arguably being contrary to the alliance’s commitment to democratic principles. Notably, it was Paraguay that in fact vehemently opposed the admittance of a Hugo Chávez led Venezuela. Consequently, critics called into question the democratic principles underlying the MERCOSUR given that a democratic shortcoming in Paraguay was strictly sanctioned whereas Venezuela’s Chavez regime was simultaneously judged by a seemingly more forgiving standard. In August 2013, the suspension of Paraguay was lifted.

In light of the outlined developments, even after the conclusion of the third-party financed project the law of the MERCOSUR continues to represent a practically important and theoretically engaging area of inquiry for the Latin America Unit. For Institute publications on the topic of the MERCOSUR, see the literature list.