MercoPress. South Atlantic News Agency

Paraguay advancing on trade agreement with Mexico, previous to requesting Pacific Alliance membership

President Franco prepared to sign the trade agreement before August 15

Paraguay and Mexico have made significant advances in reaching a trade agreement in the framework of the Latinamerican Integration Association, ALADI, according to Paraguayan diplomatic sources.

“We achieved significant advances, particularly in issues such as markets access, rules of origin, institutional aspects and resolving controversies”, said an official release from the Paraguayan Foreign ministry, in reference to a round of meetings held last week in Mexico City.

“Discussions are geared to quicken the negotiations process to reach an agreement”, revealed Deputy Foreign minister Manuel Maria Caceres.

Outgoing president Federico Franco had anticipated that he would not wait for the inauguration of the new administration to sign a free trade agreement with Mexico if all was ready before then. Next 15 August, president elect Horacio Cartes, winner of the 21 April ballot will officially take office.

Cáceres further revealed that negotiations are on going through video-conference and a new round of talks is scheduled for next Monday, 5 August. He added that this first agreement is “the first step for a full free trade agreement with Mexico, which is one of the conditions to become full member of the Pacific Alliance”, a block of which Paraguay (and Uruguay) is currently an observer.

The Pacific Alliance includes Perú, Chile, Colombia and Mexico.

“The understanding with Mexico has the objective of achieving market access for national production such as the garments industry”, said Caceres.

Paraguay is currently suspended from Mercosur until 15 August when Cartes takes office. The decision from Argentina, Brazil and Uruguay was reached in July’s summit at Montevideo, but Paraguay is not interested in the return to Mercosur because of the ‘illegitimate’ incorporation of Venezuela.

In June 2012, when following political impeachment Fernando Lugo was removed from office and replaced by President Federico Franco, Mercosur claimed it was a ‘congressional coup’ and suspended Paraguay until new presidential elections. But at the same time and taking advantage of the absence of suspended Paraguay, Mercosur approved the incorporation of Venezuela as full member of the group, which Asuncion considers illegitimate.

This is for two reasons: the Mercosur charter demands that such incorporations must be unanimous and with all members attending; secondly the Paraguayan Senate never approved such incorporation, on the contrary it voted against it.

Thus Paraguay to return is demanding respect for the country’s dignity, rule of the law, international law and Mercosur institutions.