Ratifiable Flexibility: Domestic Coalitions and Chile’s MERCOSUR Association

MERCOSUR was built as a customs union, yet it has expanded mainly through a thinner instrument: association. Why did member governments accept, formalise, and then reproduce Chile's associate status under the 1996 Economic Complementation Agreement (Acuerdo de Complementación Económica) No. 35 instead of pressing for accession? This article argues that the agreement was a ratifiable compromise. Liberal intergovernmentalism explains the first stage of the mechanism, the formation of national preferences from sectoral interests; two-level games explains the second, bargaining under the shadow of domestic ratification. The evidence combines treaty texts, national ratifying instruments, customs and trade records, and official reporting on the 2025 origin reform. Chilean exporters sought access while agriculture demanded compensation; member governments sought a wider market without reopening tariff disputes. The resulting design paired a ten-year liberalisation schedule, retained tariff autonomy, and consultative participation without voting rights. The 2025 replacement of the origin annex reproduced that allocation, deferring self-certification until a further bilateral instrument. Associate status is therefore not an exception to MERCOSUR's integration logic but a product of it. The case shows how ratification politics, rather than treaty ambition, sets the depth of integration.