Mercosur new winds are blowing - Mercosur les vents qui soufflent

Mercosur: new winds are blowing

by Mauricio López Dardaine

Note written on Tuesday May 31st, 2016: 

It looks as if the winds that are blowing within Mercosur are reaching gale-force; first in Venezuela, where part of the military supporting  President Maduro are becoming extremely critical of the internal situation. But also in Brazil, where the temporary government is under flak, even from within. One gathers there must be very strong currents of change within our South American societies for these changes to be gathering such momentum, and showing no signs of relenting. 

All of the above, of course, cannot but have its influence vis-à-vis what changes will be taking place within Mercosur as a block. 

LE MERCOSUR ET LES VENTS QUI SOUFFLENT 

Ce sont maintenant les vents qui soufflent au Vénézuela ceux qui auront, dans les semaines à venir une influence directe sur le Mercosur. Ce mois-ci, comme tous les six mois, le Mercosur doit changer sa présidence pro-tempore, par ordre alphabétique. C'est l'Uruguay qui la détente à présent; c'est alors le Vénézuela qui doit recevoir la dite présidence. Est-ce le Vénézuela aujourd'hui en conditions d'administrer les complexes affaires d'un bloc ou aussi, le plus important des pays qui le compose, le Brésil, est en train de vivre des jours ci-difficiles?

Chaque jour apporte des nouvelles sur la situation du Brésil et du Vénézuela. Même des petites histories que néanmoins font la une des journaux brésiliens, comme les frais de coiffeur de Mme Dilma Rousseff. Et les jours qui nous approchent du sommet du Mercosur ne font qu'augmenter la préoccupation à propos de ce sommet. Que peut-on attendre comme résultat avec un Brésil qui concentre toutes ses énergies vers la votation de leur Parlement, une votation qui va décider le sort de Mme Rousseff? Nous n'avons pas de réponse. En Anglais on dirait: "your guess is as good as mine!"

As with the world at large, Mercosur cannot escape the winds of change, winds of turmoil? As from the end of 2015, a series of converging -but apparently separate- events have shaken three of the five Mercosur Member Countries.

In Venezuela, the parliamentary election won by the opposition has put president Maduro’s government in a still more disturbing situation than hitherto.

In Argentina, the presidential election -also won by the opposition after twelve years, that is three periods of Kirchner administration- has opened the door to a series of transformations pointing in the direction of a more open economy and also of a far more complex balance of political power.

In Brazil, the impeachment process against president Dilma Rousseff, plus the temporary government that has recently taken office -of a clearly different political colour- are already resulting in changes that cannot but  have a bearing on Mercosur as a whole.

Ours is not a blog where one analyses political matters; we just point at these three extremely significant political changes in Venezuela, Argentina and Brazil, because without taking them into careful consideration, one cannot understand the new winds blowing within Mercosur. Within the two smaller Mercosur countries, Paraguay and Uruguay, nothing of a similar nature has occurred during these last months. However, their respective governments are not immune to the strong vibrations the political movements in the other Member Countries are conveying.

Mercosur is now 25 years of age. Born in 1991, with the signing of the Asunción (Paraguay) Treaty, the goal of the founders was that of creating a Customs Union. Although by the end of 1994 the four founding countries (Argentina, Brazil, Paraguay and Uruguay) had laid down the foundation to make this goal attainable, the administrations of the Member Countries fell short of the original commitment. The founding impetus was lost somewhere along the road to full integration. Myriads of papers by very learned people have been written to explain this failure. It would take too long, however, to go into it here.

Mercosur is (almost) a free trade zone. It has, however, one of the attributes of a customs union: an External Common Tariff. This external common tariff may be one of the reasons Mercosur has been able to remain a block after many a controversy has, time and again, threatened disruption.

Today, with new governments in Argentina and Brazil (the latter albeit temporary), Mercosur is discussing in which direction it will move?

There are two key movements Mercosur can make. On the one hand, there is the Pacific, the region of the world where considerable trade changes are actually taking place. For some time now, Chile has been telling Mercosur leaders to join their Pacific Alliance (Alianza para el Pacífico), where the other Member Countries are Mexico, Colombia and Peru. On the other hand, political signs from the E.U. are stronger now. The recent presentation of bilateral offers which took place between Mercosur and the E.U., is a step in the direction of an eventual closing, in a foreseeable future, of negotiations that have been going on for years. However, the strong opposition by agricultural lobbies of a number of EU countries remains a stumbling block in the road ahead. (One ought to add that Venezuela does not participate in the Mercosur –E.U. negotiation).

What is clear now is that Mercosur countries have a good chance of shaking their prolonged drowsiness. The recent visit to Buenos Aires by José Serra, Brazil’s Minister of Foreign Affairs, who met both the Argentine Minister of Foreign Affairs, Ms. Susana Malcorra, and President Mauricio Macri, is a step in such direction. Even if discrepancies exist (as is usually the case between Argentina and Brazil), it is clear that both countries need one another. Every time Brazil and Argentina have joined forces, Mercosur has stepped in the direction of progress. They both know this, and have often proved they can shake off their traditional rivalry and give priority to the common cause.

NOTE: After having written the above,
one sees the political situation in Brazil is looking
more and more like a quagmire for president Temer.

The "Lava Jato" affair, the corruption scheme involving
state-owned Petrobras and politicians from both Dilma
Rousseff's party and that of president Temer, is a bomb
under the temporary government's feet. This makes one
wonder how long will Temer be able to be at the helm?

Encore une note sur le Brésil et le Mercosur

La grave  situation politique du Brésil, avec une forte réduction de leur produit brut, et puis sa considérable répercussion sur les exportations industrielles de l'Argentine, son principal partenaire dans le Mercosur, est sans doute une des questions qui ne peut avoir été absente dans la réunion entre les deux ministres des affaires étrangères, la semaine dernière à Buenos Aires.