Tensions in Mercosur flared up again this Wednesday (30th), after the warning given by Argentina, Brazil and Paraguay to their partner Uruguay for the eventual signing of unilateral agreements with China and the Trans-Pacific Partnership.
Montevideo ratified its intention to move forward.
In a joint note released today by the Ministry of Foreign Affairs of Argentina, the three countries announced that they could adopt legal and commercial measures against Uruguay, if such a scenario materializes.
In addition to negotiating an FTA (Free Trade Agreement) with China without the approval of Mercosur partners, the Uruguayan government intends to request its entry into the Trans-Pacific Agreement. This partnership is made up of Australia, Japan, Canada, New Zealand, Brunei, Chile, Malaysia, Mexico, Peru, Singapore and Vietnam.
“We feel that we have every right to do this,” Uruguayan President Luis Lacalle Pou said at a press conference.
For decades, Uruguay has claimed the possibility of negotiating trade agreements individually. A joint resolution of the year 2000 and the founding treaty of 1991 establish, however, that agreements must be reached as a group by the partners.
The warning issued by the three partners comes a few days before the Mercosur presidential summit, to be held in Montevideo, on December 5th and 6th. At the event, the Argentine president, Alberto Fernández, will receive the rotating presidency of the group from Lacalle Pou.
“We were very frontal in the melee. We were very frontal in the Mercosur meetings. And we have a week that is going to be fun,” stated the Uruguayan president, referring to the summit.
clash of interests
The reaction responds to the “actions of the Uruguayan government with a view to the individual negotiation of trade agreements with a tariff dimension, and taking into account the possible submission, by the Oriental Republic of Uruguay, of a request to adhere to the Comprehensive and Progressive Agreement for the Transpacific Partnership-CPTPP “, says the note released by Buenos Aires.
According to the text sent to Uruguay’s National Coordination before the Mercosur Common Market Group, the bloc’s highest body, “the three countries reserve the right to adopt any measures they deem necessary for the defense of their interests in the legal and commercial spheres “.
The note is released at a time when the Foreign Minister of Uruguay, Francisco Bustillo, is traveling through Australia and New Zealand.
China in the crosshairs
Uruguay is negotiating an FTA with China, an option disputed, especially by Argentina and Paraguay, and which has been tensioning the commercial group.
The countries that make up the bloc “are always working on the idea of strengthening Mercosur instances”, defended the Chief Minister of the Civil House of Argentina, Juan Manzur, at a press conference.
That is why “the decisions that are taken, which have an impact on each country, must be consensual, and not isolated from some countries, and in this fits what Argentina is saying today”, he explained, when asked about the note joint.
Some time ago, Uruguay announced advances in the FTA with China, by concluding, in a satisfactory manner, a feasibility study. The agreement has not yet been signed.
Montevideo has repeatedly asked the bloc for greater flexibility to advance in agreements outside Mercosur, but Argentina and Paraguay are opposed to this strategy.
Brazil, which had a more ambivalent stance during the presidency of Jair Bolsonaro, joined on Wednesday the objections of the other two partners to warn Uruguay about the case, one month after the inauguration of the new government of Luiz Inácio Lula da Silva.
The expectation is that the Brazilian position will be strengthened with Lula’s inauguration. In his two previous terms, the petista was a staunch defender of a Mercosur walking together.
This block of 300 million people negotiated a trade agreement with the European Union. Two decades later, the pact has still not materialized.
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