“It’s a major institutional blow, maybe the most serious in the 21 years of Mercosur” said Uruguayan Vice president Danilo Astori in direct reference to the group’s decision to incorporate Venezuela with the approval of Argentina, Brazil and Uruguay and the absence of Paraguay.
What happened last Friday in Mendoza with the incorporation of Venezuela and the sanctioning of Paraguay “is an aggression that goes directly to the heart of the Treaty of Asuncion and ignores one of the most important basic rules which is that the incorporation to Mercosur of a full member must be approved by all existing full members”, said Astori, in open discrepancy with President Jose Mujica, Foreign minister Luis Almagro and lawmakers from the ruling coalition.
Astori pointed out that the path chosen for the incorporation of Venezuela “could have important consequences for the future, since the institutional framework of Mercosur is so weak that it becomes useless”.
Regarding the open discrepancy with President Mujica, who argued the support for Venezuela was a “political decision” and the result of a long “transaction”, Astori revealed that the differences were discussed at the ministers council on Monday, but “in my opinion, following this very serious institutional blow any thing can be expected from now on, since there is no major ruling from Mercosur left to be violated”.
The Uruguayan Vice president also underlined he didn’t like the fact that the rest of the presidents had taken advantage of Paraguay’s suspension “to support a resolution which the very Paraguayan parliament had somehow vetoed”.
The decision to incorporate Venezuela in the conditions it happened “has already been taken”, nevertheless Astori is hopeful it can be reversed: “hopefully something can be done to revert it, if that possibility existed I believe it must be explored”, said the Uruguayan Vice president.
“Uruguay went with the position of disagreeing with the incorporation of Venezuela taking advantage of the current situation, but things happened in a different way. Minister Almagro continues to stand in discrepancy with the procedure. But the resolution adopted was another and we hope there is a chance of reversing the decision. Uruguay proposed July 31 for the final decision, so we have to wait and see if such possibilities exist”.
Astori also pointed out at the Council of Ministers some of the positive aspects of the Mendoza Mercosur summit: the possibility of bilateral trade agreements with third countries and having contained Argentina and Brazil’s intention to increase the common external tariff to its maximum (35%) which was finally negotiated “to use such an option but on 200 goods which have been added to the list of exceptions to be managed by each country member”.
The Uruguayan Vice president an economist and former Economy minister under the previous government of the current ruling coalition has been particularly critical of the limits imposed by Mercosur senior members Brazil and Argentina on Uruguay and Paraguay in trade terms.
This is extensive to the discriminatory (and unfounded) policies implemented by both countries limiting market access to Uruguayan exports, as well as Argentina’s whims when it comes to the approval of structural loans for the weaker asymmetrical economies of Uruguay and Paraguay.
Argentina with the silent consent from Brazil has also blocked the sale of Paraguayan energy to Uruguay; interrupted an international bridge with Uruguay for six years over the conflict of the construction of a pulp mill; has yet to fulfil its promises to dredge the access canal to Uruguay’s main grains’ port (which under the River Plate administration accord must have the support from both members) and is pushing for a tax data exchange agreement which could have significant effects for Uruguay’s real estate values and banking system.
The continuous pounding of Argentina, and more silent attitude but equally effective from Brazil has surfaced growing opinion for a review of Uruguay’s links with Mercosur, not necessarily abandoning the group but scaling down the relation to an “association” such is the case of Chile, which has a policy of lower tariffs, opening its market and trade agreements with the leading blocks of the world, US, China, EU, Canada, Mexico, Korean, Australia, etc.