Tuesday, February 27, 2024

LATIN AMERICA | 05-12-2022 17:48

Mercosur’s future in balance as summit begins

Argentina, Brazil and Paraguay reiterated their criticism of Uruguay on Monday over their partner’s willingness to negotiate agreements with countries outside the Mercosur bloc.

Argentina, Brazil and Paraguay reiterated their criticism of Uruguay on Monday over their partner’s willingness to negotiate agreements with countries outside the Mercosur bloc, warning that continuing down the path could "lead to a rupture."

The comments, delivered as the bloc’s summit got underway in Montevideo, were matched by the Uruguayan government saying that the Mercosur is on its way to “extinction.”

"We need a bloc capable of strengthening ties with other countries and blocs. We cannot allow ourselves to remain immobile," said the host nation's foreign minister, Uruguay's Francisco Bustillo, in his opening speech at the meeting of the Common Market Council.

The Uruguayan official clarified that his country "does not intend nor does it want to break up the bloc" founded in 1991, but considered that the current state of play is taking it closer to "extinction.”

These words were a response to the speech by Argentina’s Foreign Minister Santiago Cafiero, who considered "that a path is being taken that could very probably lead to a break-up" of the bloc, a reference to Uruguay's attempts to negotiate bilateral trade deals and treaties with third countries, without the approval of its Mercosur partners.

Bustillo pointed out that Mercosur currently has 11 agreements in force and only four of them are with nation’s outside the region. 

"A not insignificant fact is that since 2010 to date, the World Trade Organisation has registered 172 free-trade agreements. None of them are with Mercosur," he said.

"We do not have an agreement with any of the 10 major economic and trade powers in the world," added Bustillo.

Monday’s meeting was a precursor to Tuesday’s presidential level summit, which will be attended by Argentina's Alberto Fernández and Paraguay's Mario Abdo Benítez, as well as Uruguay's Luis Lacalle Pou. 

Brazilian leader Jair Bolsonaro will be absent from proceedings, as he did last July during the meeting in Asunción.

Fernández will take on the pro-tempore presidency of the bloc on Argentina’s behalf from Lacalle Pou.


‘Entertaining’ summit

The Uruguayan president last week predicted an "entertaining" meeting in Montevideo, after a diplomatic note was jointly published by Brasilia, Buenos Aires and Asunción raising the prospect of "possible measures" against Montevideo for its request to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Hours after the communiqué was released, the Uruguayan government confirmed its application to join the trade deal that includes  Australia, Japan, Canada, New Zealand, Brunei, Chile, Malaysia, Mexico, Peru, Singapore and Vietnam. 

This is a new chapter in a dispute that the smallest country in the bloc, with 3.5 million inhabitants, has maintained with its partners for decades.

Lacalle Pou's government is also trying to negotiate a free-trade deal with China without the approval of the other Mercosur members, a move which has particularly angered Argentina and Paraguay.


Road to ‘rupture’

A joint resolution from 2000 and the bloc’s founding treaty of 1991 state that Mercosur agreements must be agreed as a group by all partners, an interpretation of the rules that Uruguay does not share.

"We are concerned about certain unilateral attitudes, aimed at bilateral negotiations with third countries outside the bloc's consensus," said Cafiero. "We consider this to be contrary to Mercosur's rules.”

He continued: "We are not afraid of bilateral approaches", but "they have always been the fruit of consensus.”

"We see with concern that a path is being taken that could very probably lead to a rupture" of the bloc, the Argentine official said.

Brazil’s Foreign Minister Carlos França, said his country is "open to discussing flexible modalities" as long as they take place "in a frank and transparent manner, within the relevant bodies of the bloc and respecting the basic principles" of Mercosur.

"Consensus is the rule of Mercosur and we must respect it (...) The objective of the Treaty of Asunción is clear, there is no room for interpretation," said Paraguayan Foreign Minister Julio César Arriola. 

For Ignacio Bartesaghi, a specialist in international relations, Uruguay "has so far (...) initiated announcements and actions that have no possibility of a legal claim.”

He also pointed out that the absence of Brazil, "the main power" of the region, for the second consecutive summit, is a clear indicator of the current fragile state of the bloc.


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