MercoPress. South Atlantic News Agency

Mercosur summit challenge: how not to deepen differences

Mercosur headquaters is waiting for Presidents

Mercosur presidential summit which begins Tuesday does not have much to show besides an unfinished agenda, pending proposals and a list of issues that if openly debated can prove explosive for an already anemic trade group.

The good news is that Mercosur will be signing its first agreement with an out of the region member, Israel, and that Argentina's first elected woman president, Cristina Fernandez de Kirchner will be in Montevideo to receive the groups' six months chair from Uruguay's Tabare Vazquez. An event by itself since Argentine/Uruguayan relations is going through a rough moment, because of the pulp mills' dispute, which has also extended to the personal links between President Vazquez and the Kirchner couple. The Strategic Plan to overcome asymmetries, the double billing of the joint external tariff and the drafting of the Customs Code remain unfinished in spite of promised commitments. The Strategic Plan is an instrument to allow junior partners better and quicker access to senior members markets, but the initiative remains "frozen" and no benefits are palpable for Uruguay or Paraguay. Similarly with the double billing of the common external tariff, since no mechanism has been found to share revenue from tariffs, and with the Customs Code, that Argentina and Paraguay do not support as currently drafted. All these proposals, it was agreed in the last summit in Brazil, were to be implemented during 2008, but there's "no light at the end of the tunnel". Besides Paraguay is asking more resources for the Mercosur Structural Convergence Fund which is geared to provide soft loans for the weaker economies. Uruguay is requesting an end to non tariff restrictions; more flexibility for members to negotiate with third parties and an end to the investment incentives policies in Brazil. Uruguay is also asking that the Mercosur Controversies Tribunal resolutions, given the recent experience over the pulp mills controversy with Argentina, imply coercion and not merely good intention resolutions. As to the list of "turbulent" issues to avoid, Mrs. Kirchner has the cash-full suitcase incident, involving Argentine and Venezuelan officials and which apparently was intended for her presidential campaign. Several of those involved and the suitcase carrier of 800.000 US dollars with dual US/Venezuelan passport Antonini Wilson is under FBI custody in Miami. Whatever the revelations they could be most damaging for Venezuela and probably Argentina. Uruguay's Vazquez will probably not want to insist with the pulp mills controversy; Paraguay's Nicanor Duarte Frutos can only recite a list of complaints about the attitude of big brother Brazil and could adopt quiet politeness, or let his soul talk: he's leaving in a few months time. And there's Venezuela's Hugo Chavez who is in the process of incorporation to Mercosur but has seen his bid sink in the Congresses of Brazil and Paraguay. Chavez on several occasions had warned that if this request wasn't accepted by the end of 2007, he "could live without Mercosur". But his recent political setbacks at home and the cash full suit case incident, currently before a US district court, could turn the summit in Montevideo into an excellent tribune to blast his conspiracy theories against the US and President "Danger" Bush. No wonder then that there's no official dinner, just a shared working breakfast early Tuesday; Uruguay handing the Mercosur chair to Argentina, the speeches and a quick return of all presidents back home. So the Montevideo summit could become a delicate minuet of how to avoid complicated issues and situations with a final barrage by Chavezâ€Ã‚¦but Brazil, and Uruguay as host, could ask him to contain his words.