The first face-to-face meeting of Mercosur heads of state since the pandemic takes place this Thursday (21), in Asunción, Paraguay, in an anticlimactic environment.
President Jair Bolsonaro (PL) said on Sunday that he should do a “back and forth”. The one from Argentina, Alberto Fernández, travels with a heavy head due to the political and economic crisis in his country, with annual inflation at 64% and intense demonstrations in the streets. Paraguay’s Mario Abdo Benítez is also experiencing a complicated internal situation, with the division of the Colorado party in April next year.
Who promises to mess up the bandstand is the Uruguayan Luis Lacalle Pou, who must present to his peers an assessment of the negotiations with China for a trade agreement between the two countries.
The decision to negotiate outside the bloc confronts resolution number 32 of the Mercosur statute, which prohibits members of the bloc from making economic agreements with other countries without the approval of the others.
Lacalle Pou says that there is a loophole in the statute that allows this and that he does not want to leave Mercosur. The one with the most resistance in relation to the Uruguayan movement is Argentina. On an earlier occasion, when addressing the same agreement, Fernández stated that if Lacalle Pou wanted to do things alone, it was better for him to “abandon the boat”, suggesting that he leave the bloc.
The Uruguayan president confirmed last week, in a press conference, that the so-called study phase, which precedes the negotiation of the free trade agreement, had ended, and that it was now time to start negotiating the terms.
“We are convinced that international law and the treaties signed by our country allow us to establish all kinds of agreements with different nations,” said Lacalle Pou at the time. He also added that Uruguay has an “opening vocation that does not contradict its participation in the bloc”.
The Argentine chancellor, Santiago Cafiero, stated that “any type of treaty of these characteristics, according to the historical construction of Mercosur, which is the Treaty of Asunción, must have the consensus of all parties”.
“With the customs union we have the entire market well articulated between food producers and manufacturers. What we need is that there must be consensus for any agreement that takes place outside Mercosur”, he said.
Lacalle Pou also suffers from internal resistance in his country in relation to the agreement with China. The opposition and local chambers of commerce have been against it.
Former economy minister and former president of the center-left Frente Ampla coalition, Danilo Astori, stated that “with the situation we are experiencing, it would not be possible to make a trade agreement with China without breaking with Mercosur, which shows a very proactive attitude on the part of the president, but it can come at a high cost,” he said. “A break with Mercosur is the worst that Uruguay can do now in terms of commercial insertion.”
For Paraguay, the topic is uncomfortable because the country has no relations with mainland China and is the only country in the region that recognizes Taiwan as a state. “We will always defend Paraguay’s interests, and Taiwan is an ally,” said Paraguayan Foreign Minister Jose Arriola.
In an interview with journalists earlier this week, Arriola said the meeting will have two communiqués, one with the bloc’s members plus Bolivia, and another with associated countries.
Bolivian Luis Arce confirmed his presence, but Chilean Gabriel Boric will be represented by his chancellor, Antonia Urrejola. Colombia will be present through its vice president and chancellor, Marta Lucía Ramírez.
Abdo Benítez had proposed to member countries that they receive a live call from Ukrainian President Volodymyr Zelensky. Zelensky’s participation, however, has not yet been confirmed because, according to the Paraguayan Foreign Ministry, “there is still no consensus among the member countries on the convenience of the meeting”, affirms the Paraguayan Foreign Ministry.
This Wednesday, Mercosur announced at least one advance: the conclusion of negotiations for the free trade agreement between the bloc and Singapore.
The agreement involves tariff and regulatory issues, such as services, investments, government procurement, intellectual property and trade defense, in addition to providing for commitments in financial services and the movement of people.
According to the Brazilian government’s note, the signature could generate an increase of R$ 28.1 billion in the country’s GDP (Gross Domestic Product) between 2022 and 2041. For the same period, the ministry estimates an increase of R$ 11.1 billion in investments, BRL 21.2 billion in Brazilian exports to the Asian nation and BRL 27.9 billion in imports.
with Reuters
