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ECONOMY | 07-12-2022 00:55

Mercosur members avoid rupture at summit as leaders voice concerns

Summit ends with parties reiterating their differences over free-trade deals, as President Alberto Fernández accuses Uruguay’s Luis Lacalle Pou of wanting to ‘break up’ the Mercosur trade bloc.

The latest presidential summit of the Mercosur trade bloc ended in an uneasy peace this week as the region’s leaders reiterated their differences over how to boost trade but thawed ties enough to avoid a rupture.

Nevertheless, there were some uncomfortable moments during proceedings. President Alberto Fernández gave a fiery speech during his participation in the meeting’s plenary session in Montevideo, as he accused his Uruguayan counterpart Luis Lacalle Pou of seeking to break the rules of the bloc founded in 1991.

"You invited me to be sincere, I will be," began the Peronist leader, who also issued stark criticism of the conditions laid out in the regional bloc’s historic but stalled free-trade deal with the European Union (EU), which has dragged on for more than two decades.

After quoting writer Mario Benedetti, Fernández said: "One of the conditions in a society is to comply with the rules. When you play football there are rules and you have to respect them. The Mercosur rules say that these agreements must have other treatment mechanisms. When someone in a society breaks the rules, they are breaking them.”

Lacalle Pou has reiterated his intentions to close the agreement with the European Union and to continue bilateral negotiations to close separate trade agreements with China and Turkey, and finalise Uruguay’s entry into the Trans-Pacific Partnership (TPP). 

Last week, Argentina, Brazil and Paraguay issued a joint communiqué warning that they could take possible legal and trade measures against Uruguay over its request to sign up to the multinational treaty.

"We have spoken bilaterally with all the countries. I want to repeat that this is what drives Uruguay's foreign policy: opening up to the world. It is not a question of rupture, but of resolving tensions," the Uruguayan president told his peers and their foreign ministers.

"We cannot wait 25 years to sign an agreement. It is neither serious nor credible, which is why we intend to continue expanding Mercosur's possibilities," he added.

Fernández, who assumed the pro-tempore presidency of the bloc at the summit, asked for member states to discuss the asymmetries in the economies of each nation and to rebalance the agreement with Europe. 

"Nobody wants an agreement with the EU more than I do, but one that is dignified for Mercosur … the truth is that in Europe there are protectionist countries that do not want our meat, our grains and our food to enter," the head of state complained.

At this point, he invited the EU to "speak frankly" and to discuss a mutually beneficial treaty: "A partnership is a win-win situation. When one side wins and the other loses in a partnership, it is another matter."

Lacalle Pou dismissed the criticism by hinting that other states had broken the bloc’s rules in the past. "I am sure that no-one took a plane to come to our country to look for more conflicts," he said.

"Of course, if we negotiate as a group it is much better,” he said. “What we are not prepared to do is to stand still.”

Paraguayan leader Mario Abdo Benítez, Brazil Vice-President Hamilton Mourão (standing in for Jair Bolsonaro, who skipped a second consecutive summit) and Bolivia’s Foreign Minister Rogelio Mayta Mayta also took part in the summit.

Adopting a more conciliatory tone, Paraguay's Abdo considered it positive to "share the negotiation process with the bloc before it culminates," as Lacalle Pou has proposed. 

After the handover ceremony, Fernández calmed and praised the Uruguayan leader’s guarantee that his country would remain a Mercosur member.

"I'm taking homework with me. I think we should review the rules, have a margin of flexibility," he said, referring to the Asunción Treaty, which states that member countries cannot enter into agreements without the consensus of the rest of the bloc.

"I like debating more than dulce de leche," Lacalle Pou quipped to a laughing Fernández, before promising to continue negotiations at lunch. 

Mercosur recently concluded talks on a free-trade agreement with Singapore.



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