MercoPress. South Atlantic News Agency

Mercosur remains strategic for Uruguay and must be “strengthened”

President Vazquez will have to inject new vitality to the anaemic group.

Uruguay will emphasize the need to “strengthen” Mercosur given the global context and the current weakness of the group’s cohesion said the country’s head of the Economic, Integration and Mercosur affairs office at the foreign relations ministry. However the current political environment does not seem to be the most appropriate.

“We believe Mercosur is going through a moment of weakness and therefore when Uruguay takes the chair next July we are going to underline the need to strengthen the group”, said Walter Cancela.

Paraguay that currently holds the pro-tempore chair will be hosting the Mercosur presidential summit next July 4th in Asunción. At the official ceremony President Tabare Vazquez will symbolically receive the post from his Paraguayan peer Fernando Lugo.

The summit will be preceded by a meeting of the Common Market Council which brings together Foreign Affairs and Finance ministers from the country members. The meeting is considered crucial not only because of the global crisis but because Argentina and Brazil have been acting with increasing autonomy from junior members Paraguay and Uruguay that bitterly complain they are left out of the decision making process.

Uruguay is particularly concerned with some protectionist practices implemented by Argentina which have hindered the country’s exports. Another pending issue is to agree on eliminating the double levy of the Common External Tariff. That is that goods should pay tariffs only once, no matter which Mercosur country is the final destination. Currently a good imported through Argentina which ends in Paraguay pays twice.

“Mercosur is going through one of its worst moments”, said Cancela, but for Uruguay the block remains “strategic”. With the global slowdown, Mercosur has again become Uruguay’s main trade partner, which makes it even more significant for the country.

Cancela said that in mid June the Common Market Group will be meeting to decide on the Asuncion summit agenda and Uruguay’s proposals for its six months as chair of the group, “but President Vazquez main task will be to give more strength to the regional trade block”.

This feeling does not belong solely to Mercosur junior members. In a recent interview a Brazilian minister described Mercosur as a “body without soul”. Strategic Affairs minister Roberto Mangabeira Unger called for a joint project to overcome “the huge asymmetries of power between Brazil and its neighbours”.

“We have an objective problem with Mercosur: the huge power asymmetry between Brazil and its neighbours. It’s an organization which discusses trade, energy, infrastructure integration, but has no project”, he said.

Analysts point out to the fact that all four full member countries are going through exceptional political circumstances: President Vazquez is in the last year of his term and at the end of the month the ruling coalition will be electing his successor; Argentina also faces crucial mid term elections at the end of June; Lula da Silva is Brazil’s most popular president in decades but has no heir apparent and can’t be re-elected again; Paraguay is going through an institutional transition period following the defeat of the sixty year dominance of the Partido Colorado to the hands of a former bishop, President Lugo.