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Leddy for their valuable comments and helpful suggestions. He also thanks Maria Schueneman and Agueda Gonzales for library assistance.

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Mercosur has survived several crises by resorting to presidential diplomacy, but it risks becoming an empty shell unless member states work to coordinate macroeconomic policies. Its survival depends on the outcome of domestic political struggles in Brazil and Argentina and on the harmonization of exchange-rate policies between the two countries. This article examines the Argentine-Brazilian "trade wars" provoked by successive devaluations o f the Brazilian currency, aggravated in 200 1 by the Argentine economic crisis. The social explosion in Argentina in December 2001 showed that domestic actors can successfully challenge proglobalization policies. To consolidate, Mercosur will have to address the democratic deficit while building supranational institutions and a n effective dispute-settlement system. he devaluations of the Brazilian currency in 1999 and 2001 and the