MercoPress. South Atlantic News Agency

Mercosur summit threatened by Argentine boycott on Paraguayan foreign trade

Guillermo Ehrecke, president of Paraguayan maritime and fluvial agencies

A Mercosur internal conflict involving Argentina and Paraguay which is conditioning the coming presidential summit in Brazil and has again suspended a vote for Venezuela’s final incorporation to the group, seems to have escalated in the last 24 hours.

Paraguayan authorities consider “insufficient” the Argentine maritime workers union (SOMU) decision to temporarily lift the boycott imposed on Paraguayan maritime and fluvial traffic virtually paralyzing the country’s foreign trade.

Landlocked Paraguay’s position was confirmed by the Paraguayan Fluvial and Maritime vessels owners’ centre, Guillermo Ehrecke who together with other businessmen from the sector had a long interview on Friday with Foreign Affairs Minster Hector Lacognata in the capital Asunción.

Paraguay for its foreign trade depends almost exclusively on two mighty South American rivers, Parana and Paraguay which cross through Argentine territory to the heart of the continent.

“The reply from Argentina that SOMU has decided to grant a five-day truce is considered absolutely insufficient by the Paraguayan government”, said Ehrecke who acted as spokesperson following the several hours meeting.

“Faced with this situation we express our satisfaction with the stance adopted by the Paraguayan government”, said Ehrecke.

Because of the boycott and the ‘hands off’ attitude from the Argentine government, authorities informed their Mercosur partners (Argentina, Brazil, Uruguay and Venezuela in the process of incorporation) that Paraguay’s participation in the coming presidential summit December 17 in Foz de Iguazu, Brazil, has been conditioned to a positive solution of the conflict.

On that day also the Mercosur rotating chair currently held by Brazil must be handed over for the next six months to Paraguay.

The Paraguayan Foreign Affairs ministry is expected to make a decision on President Fernando Lugo’s Mercosur summit attendance on Monday following the weekend’s events.

“Paraguay demands a full and definitive lifting of the boycott (an estimated 7.000 containers are blocked in the port of Buenos Aires), and not a simple truce. I think that out of respect, the country can’t accept a simple truce”, insisted Ehrecke.

Paraguay demands the conflict be addressed as an international law case and that Argentina abides by the Mercosur charter which guarantees the free circulation of goods and produce. However the administration of President Cristina Fernandez de Kirchner has aligned with the unions and considers it a “labour conflict”.

This attitude has had collateral damage since a political agreement reached with the opposition in the Paraguayan Congress to vote for Venezuela’s incorporation to Mercosur, had to be again postponed given the current situation.

Venezuela is waiting for Paraguay’s vote to fully incorporate to Mercosur. Venezuelan President Hugo Chavez first applied to become full member in late 2006.

The Paraguayan vessels owners centre has been warning for over a month about the restrictions imposed on trade to and from Paraguay by the Argentine Maritime Workers Union, SOMU, which alleges that a local branch of their organization in Paraguay has been systematically ignored by local authorities in spite of a “conflict situation”.

Paraguayan maritime agencies and maritime trade unions allege that the so called SOMU Paraguay branch is a “make-up” which has the support from Argentine agencies and a wink from the administration of President Cristina Fernandez whose final objective is to have full control of all trade along the Parana and Paraguay water courses.