MercoPress. South Atlantic News Agency

Mercosur review, top of the agenda for Uruguay’s next president

Mercosur building in Montevideo: A too ambitious project that has fallen short of its objectives

It wasn’t an issue during the electoral campaign trail and hardly mentioned in political rallies but Mercosur is high in the agenda of whoever wins next Sunday’s presidential election in Uruguay.

(Argentina, Brazil, Paraguay and Uruguay, plus Venezuela in the process of incorporation) is “in a mess” and can only go ahead “if Brazil makes it work”.

Former president Luis Alberto Lacalle, the main opposition candidate and with great chances of winning in a November run off, believes Uruguay should be “a trade partner open to all the world”, which in other words questions the current Brazil-Argentina preponderance in the group’s actions and decisions.

The incumbent Mujica has insisted in supporting the regional group and has visited Chile, Argentina and Brazil where he met with presidents Michelle Bachelet, Cristina Kirchner and Lula da Silva.

“In the current context I consider myself a great admirer of Lula da Silva and the path he has outlined. Is it a revolution, a left wing revolution?, forty million Brazilians only managed a meal every now and then, now with Lula they have a hot meat every day”, underlined Mujica.

“Sure we have differences, the asymmetries of our economies, the structural support programs for junior Mercosur members which still have to be delivered, but you can’t leave Brazil aside, can you?” argues the former guerrilla leader.

“With Argentina we have a long standing conflict over pulp mills along the River Uruguay; an irritating situation for both sides. I am very respectful of President Tabare Vazquez and his firmness in the issue, but I would try and negotiate, discuss and discuss, until we reach some kind of understanding”, added the incumbent candidate.

Candidate Lacalle is blunter even when during his first presidential mandate (1990/1995) the Asuncion Treaty which gave birth to Mercosur was signed (1991).

“Mercosur has several pathologies such as Argentine-Brazilian bilateralism; Unasur (Union of South American Nations) languishes and is a mistake, and Parlasur (Mercosur parliament) is not positive for Uruguay”, said Lacalle who anticipated that if again elected he would immediately “abandon Parlasur” because it strongly conditions Uruguay’s sovereignty.

The main opposition candidate insists Mercosur must return to its basics, “a trade association” and promised that he would strongly promote a full fledged free trade agreement with the United States, which was offered by the George Bush administration but President Vazquez accepted a milder version.

“Client of all, friend of many, allied to some and equal to none”, said Lacalle in a précis of his intentions.

Junior opposition presidential hopeful Pedro Bordaberry was equally adamant about Mercosur, “as it is today, it’s no good for Uruguay”. He added he favours the Chilean position of “associate member”.

During the five years of President Vazquez (2005/2009), Uruguayan foreign policy pushed hard for Mercosur, regional integration, consolidation of Unasur, close cooperation with energy rich Venezuela and supporting Bolivia’s claim to a sea outlet.

“Uruguay has established not only the Mercosur priority as the main axis of its foreign economic policy but also several actions to complement this main pillar which consolidates links with the region” according to Foreign Affairs minister Pedro Vaz.

However in spite of nice words, good intentions and commitment to the region, Uruguay has been involved in a major diplomatic and neighbourly conflict with Argentina over the construction of pulp mills.

The several years dispute is dead-locked, with the case under consideration in the International Court of The Hague and Argentine pickets blocking one of the main bridges linking the neighbouring countries.

The rift has also silently extended to the dredging of the access canals to the River Plate thus limiting an ambitious Uruguayan plan to develop its ports’ infrastructure.

More over Uruguay was expecting that Brazil with its regional influence should have adopted a more active role in the dispute. By remaining neutral to a “conflict among neighbours” President Lula da Silva was really siding with Argentine Presidents Nestor and Cristina Kirchner.

Uruguay at the twice a year summits not only has complained bitterly about the pickets which impede normal traffic of people and goods along the international bridge with Argentina, thus violating Mercosur norms, but has also brought up the issue of trade barriers (formal and informal) and asymmetries between the economies of the senior members and junior members, Paraguay and Uruguay.

Brazil has played the free-trade champion role in international forums but in regional affairs is not that practical and is highly sensitive to farmers’ lobbies that complain about Uruguayan (more efficient) competition.

With Argentina the situation is even worse since the country has since the beginning of the century been cut off international money markets (because of pending non rescheduled sovereign bonds) and is forced to have a double surplus policy (budget and foreign trade).

This in every day terms means Argentina has a mercantilist trade policy and slaps quotas, safeguards and pre-license import permits, with no warning, whenever its numbers turn threatening.

Uruguay therefore suffers the double impact from rather selfish senior Mercosur members who are also jealous about third parties and openly veto unilateral contacts to facilitate trade with other regions, as has been the case on several occasions.

All this happens in spite of the alleged close ideological links between former union leader President Lula da Silva of Brazil and Uruguay’s Socialist Vazquez. No wonder the Brazilian press identifies Uruguay as the “grumpy” member of Mercosur.