MercoPress. South Atlantic News Agency

Astori: “there's no way Mercosur can advance”

Uruguayan Minister of Economy Danilo Astori.

Uruguay accused Argentina of violating Mercosur regulations and Brazil of passive complicity by not reacting, and under these circumstances “there's no way Mercosur can advance”, claimed Uruguayan Minister of Economy Danilo Astori.

"When one member (Argentina) violates regulations and another (Brazil) who does not respond to those violations, probably also violating regulations", there's no future for Mercosur, said Astori following the Mercosur ministerial Friday/Saturday meeting in the Brazilian capital. The Uruguayan Economy minister was referring to the Argentine pickets blocking access to Uruguay in protest over the building of pulp mills on a river that acts as a natural border, and the fact Brazil has remained aloof from the escalating dispute. Astori added Uruguay will also continue to insist that Mercosur junior members should be allowed to sign bilateral trade agreements with third parties, underlining a decision on the issue must be reached during the first half of next year, putting an end to the "indefinite freezing" of the matter. "We are hopeful that Paraguay which next January holds Mercosur chair will also include the issue in the agenda. Junior partners Paraguay and Uruguay are bitterly complaining about the lack of benefits from Mercosur and have been trying to reach trade agreements with United States arguing that the block is becoming a "two members" club which discriminates and ignores them. Besides the acrimonious pulp mills controversy with Argentina, Uruguay has trade clashes with Argentina and Brazil. Paraguay faces similar trade situations, plus serious discrepancies over payments and refunding regarding the gigantic Itaipú dam, a joint undertaking financed by Brazil which absorbs most of the energy generated. "I'm not making any announcement, but what I'm saying is that Uruguay will not tolerate this situation to continue indefinitively, we invite all members to help find more flexibility in reaching trade agreements with third parties", underlined Astori. However he declined to reveal what the next step would be and denied he was thinking about any "drastic decision" in particular. But the fact these problems exist persist inside Mercosur with no apparent solution "evidently are a bad signal for foreign investors" he highlighted. Astori also complained about Brazil and Argentina's attitudes which have caused a trade deficit of one billion US dollars for Uruguay plus the fact that Brazil in talks with the European Union has acted unilaterally in defense of its own interests without consulting with the rest of the group or taking into consideration junior members aspirations. "Argentina reimburses taxes to its exporters, gives additional promotions to some provinces and applies price controls in its domestic market which obviously limit the competitiveness of Uruguayan products", claimed Astori. Faced with this situation Uruguay must defend itself and has imposed ad-valorem custom duties to Argentine exports from those provinces benefited with special promotion measures. "Obviously Uruguay's duties are controversial but we're reacting to Argentina. That's the Mercosur we have: one member violating regulations and another who does not react and is probably also is violating regulations".