MercoPress. South Atlantic News Agency

Mercosur agrees on the agenda for the presidential summit

Paraguay’s president Lugo will hand the rotating chair to Uruguay’s Tabare Vazquez.

Advance teams from Mercosur country members reached a tentative agenda for this month’s presidential summit at the end of the month, (July 23/24) according to sources in Paraguay the country which will hosting the meeting.

The Common Market Group met in Asunción and agreed that for the coming summit three are the main issues to be addressed: eliminating the double common external tariff, changing the statutes of the Structural Convergence Fund to make it more effective and less bureaucratic, and productive integration of economic activities along border areas.

“I think we are all satisfied with the understanding reached”, said Oscar Rodriguez Campuzano Paraguayan Deputy Minister for International and Integration Economic Relations.

At the coming summit Paraguay will hand the rotating chair to Uruguay for the next six months.

The double common tariff has been on the table for several years and refers to levies paid by imports from third countries if they happen to be introduced to more than one Mercosur country member.

The Convergence Fund which funds infrastructure investments is geared mainly in support of junior members Paraguay and Uruguay who have repeatedly complained Mercosur has become a two member club, Brazil-Argentina.

The fund was created to compensate for the repeated obstacles to inter trade imposed by the senior members on junior members that have a significant percentage of their international trade linked to Mercosur. In some cases the awarding of these soft credits have been conditioned to political issues and the idea is to make the whole process more technical, flexible and less submissive to other non specific considerations.

Finally the idea of developing frontier areas can be related to improving the integration process but also to help stabilize the many positive and negative immediate aspects of the asymmetries which plague the four country block.

Nevertheless although not mentioned, political issues will be on the table and a few of them quite challenging: the delayed incorporation of Venezuela; Honduras political situation; the new equilibrium born out of the recent Argentine mid term elections; bilateral disputes, Argentina and Uruguay referred to paper mills and Brazil and Paraguay over the sale of power from the Itaipu dam, the hemisphere’s largest operational hydroelectric complex; protectionism and hurdles to intra-trade, the A/H1N1 virus pandemic, among others.

In related news Costa Rica which now holds the Central America Integration System, SICA, chair said that the main objective in her six months mandate is to reach a trade understanding with Mercosur.

The Costa Rican Foreign Affairs ministry has outlined “as main objectives of its tenure fulfilling the conclusion of discussions for an association agreement with the European Union: closer trade links SICA-Mercosur and capitalization of the Central American Economic Integration bank”.

SICA is made up of Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica and Panama, as well as associate member Dominican Republic.