Mercosur Summit Montevideo - Cumbre en Montevideo

The Mercosur Summit in Montevideo

By Mauricio López Dardaine

The Mercosur presidents, except for Paraguay's, did gather in Montevideo for their mid-year summit. From the internal point of view, the current status of Paraguay within the block remains controversial.

From news on July 11th. from "Argentina.ar Portal":

"El ministro de Relaciones Exteriores [del Uruguay], Luis Almagro expuso las conclusiones de la reunión realizada en el Hotel Sheraton, que contó con la participación de sus pares de Argentina, Héctor Timerman, de Brasil Antonio Patriota, y el venezolano Elias Jaua.

El diplomático y anfitrión de la reunión señaló que existe "la mejor disponibilidad" para el reingreso de Paraguay al bloque el 15 de agosto cuando asuma el nuevo presidente Horacio Cartes, dado que ese país se encuentra suspendido del bloque continental desde hace un año, por el golpe institucional que sufrió Fernando Lugo.

Almagro dijo que "consideramos hasta ahora insuficientes las disculpas que han dado los países europeos en el caso del avión del Presidente Evo Morales" y explicó que se analizaron los "temas de espionaje" en el continente.

Almagro confirmó además que el presidente José Mújica traspasará a su par de Venezuela, Nicolás Maduro, la presidencia Pro Témpore del bloque regional, con lo cual por primera vez el país caribeño ejercerá ese cargo que se rota entre los mandatarios cada seis meses.

También confirmó que entre los temas que trataron y que continúan "trabajando" de cara a la reunión de Consejo de Mercado Común están también el avance de las negociaciones externas del Mercosur, especialmente con la Unión Europea, y los avances en la incorporación de Bolivia como miembro pleno del bloque regional."

There is little doubt that Mercosur is living through anxious times. A year ago Paraguay was temporarily suspended and the door was opened for Venezuela to enter the block[1]. The trouble was the rules were bent to a certain extent in order to make this double move. And Mercosur then entered a zone of turbulence. It is not crystal clear how this impasse will be resolved at the Summit. The Uruguayan pro tempore Presidency considers that once the elected president of Paraguay takes office in August, the suspension of this Member Country ought to be immediately lifted. “We understand this is the general stance. However, it is obviously something the presidents will discuss, for it was them that discussed the suspension of Paraguay”.

There is also a purely external factor that is putting additional pressure on Mercosur[2]: the creation in June of 2012 of the Pacific Alliance, which groups Chile, Colombia, Mexico and Peru. The four nations of the Pacific Alliance represent about 36% of Latin America GDP, and if counted as a single country they would be the ninth largest economy in the world with a nominal GDP of more than $2 trillion USD, surpassing India. On the other hand, today Mercosur covers from the Caribbean to Patagonia, has 275 million inhabitants, 12.8 million square kilometres and is the fitth largest economy in the world. 

Mercosur has emerged from other tight spots in their twenty two years of existence. We feel there is still plenty of room for adjustment. We also believe adjustment is indeed required. Apart from purely political aspects there’s the question of the original goal: the customs union. Today, after having tried since January 1^st, 1995 to become a customs union, and having failed, most experts are rightly suggesting the block ought to concentrate in perfecting their free trade zone, gain the degrees of freedom Uruguay and Paraguay have been demanding all along, and thus acquire the flexibility required to surf the turbulent economic and trade waters of today’s world. We personally believe internal fine-tuning should take precedence over new incorporations. Because incorporation into the block, and adjustment of the tariff structure of the new comers to the Mercosur’s Tariff Nomenclature, External Common Tariff and also to their body of common rules, means a great deal of administrative transformations for these new applicants, as we have recently observed in the case of Venezuela. It is fair to point out that Venezuela has been complying with this complex administrative burden.  

If Mercosur is to achieve the required transformation demanded by both the internal and external circumstances, maybe political needs ought to be adapted to the block’s administrative capacity. One needs to realise that the governing bodies of Mercosur operate not with full time Mercosur officials, but with officials of the Member Countries administrations, who have their own jobs at home, apart from their remarkable contribution to the block. If one bears this in mind, it is easier to understand the need to establish administrative priorities. This of course, is something easier said than done.

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[1] At the time it was only the Paraguayan Senate that was preventing Venezuela from becoming a member. Technically, the situation is still the same. And this is a bone of contention among the members of the southern block.

[2] We have already discussed the growing influence of the Pacific Alliance within South America in previous comments in this same blog.