Former Brazilian president Fernando Henrique Cardoso said that Mercosur has 'yet to crystallize as a customs union' and pointed to the common external tariff which is the founding stone but is full of objections as the main hurdle. Nevertheless I remain positive about the strength of Mercosur.
I think the common external tariff is a very serious problem. I have always understood Mercosur as a common space, in which production spreads to the entire region and does not concentrate in one place. I believe in this and I'm convinced this will make Mercosur strong, said Cardoso, during a conference in Paraguay.
He emphasized it is essential that the production process is distributed to the different areas of Mercosur.
Cardoso said that despite the current situation of Mercosur, the regional block is important because it has helped increase regional trade: Mercosur has many advantages but it is still incomplete.
Regarding the asymmetries controversy in the block, particularly regarding Paraguay, the country with the smallest economy of all members, Cardoso indicated that Paraguay has been successful in attracting Brazilian industry taking advantage of the fact it has plenty of abundant and cheap energy plus a pro-business climate.
Cardoso finally considered that relations between Paraguay and Brazil and the rest of Mercosur are back to normal following the 2012 decision to suspend the landlocked country from the group for having removed from office through Congressional impeachment, of then president Fernando Lugo.
”It was a controversial decision (from Mercosur) to marginalize Paraguay, but I believe that has been overcome and now relations are as they should always be”.
Cardoso was Brazil's president from 1995 to 2002; he is a member of the Madrid Club and the Inter-American Dialogue, from Washington as well as of Clinton's Global Initiative and the United Nations Foundation. A sociologist by training during the military dictatorship in Brazil (1964/1995) he was exiled and taught in Chilean and later US universities.