MercoPress. South Atlantic News Agency

Uruguay confirms Mercosur

“Let's not give the image that Mercosur is over and we're in a finalization process”, remarked Uruguayan Foreign Affairs Minister Didier Opertti this week following the increasing media exchange between Argentine and Brazilian delegates regarding the future of the block.

Mr. Opertti indicated that if extraordinary measures such a temporary suspension of the Common External Tariff, AEC, are needed "let's do it but institutionally, and meantime let's convene a meeting of the Mercosur Council".

This week junior ministers from Mercosur members are expected in Montevideo to prepare the Council's meeting that includes Mercosur Foreign Affairs and Economy ministers.

Argentine Minister Doming Cavallo has been insisting that Mercosur should no longer be a customs union but a free trade zone, meaning the elimination of the AEC. Brazil seems willing to accept a temporary "suspension", but Mr. Cavallo insists in its full elimination which has strained relations inside Mercosur.

Brazilian press reports indicate that the country's officials are betting that following October's legislative elections in Argentina, Mr. Cavallo might be forced to resign.

"The air is contaminated with all this mud slinging about Mercosur's future, but as far as Uruguay is concerned we have an international agenda to respond to, that is "4 + 1" talks with USA, we must reply the European Union and also the Andean Community", stressed Mr. Opertti.

Further on Mr. Opertti underlined that Uruguay accepts a bilateral dialogue between Argentina and Brazil so they can iron out differences, but "we're not going to accept a parallel discussion mechanism. Uruguay will not endorse this kind of understandings".

"The fundamentals are that with or without AEC, all Mercosur members want to continue, no one dares to run on its own. It's quiet cold out there?.", added Mr. Opertti.

Uruguayan president Mr. Jorge Batlle reinforced Mr. Opertti's remarks saying Uruguay wants to continue with Mercosur in spite of all, but "Brazil's constant exchange rate erosion distorts all trade in the area".

However this week Brazilian monetary authorities imposed stricter terms regarding technical bank reserves which so far have helped detain the constant depreciation of the Brazilian currency, Real, the main complaint of Mercosur partners.