MercoPress. South Atlantic News Agency

In spite of Mercosur “unfulfilled agenda”, there will be trade agreement with EU

Uruguayan Vice president also favours ‘open regionalism’

Uruguay’s Vice-president Danilo Astori said that Mercosur “unfulfilled agenda” will not affect the chances of reaching an agreement with the European Union which if finally achieved will also help the “block to work better”.

In a speech to the Uruguayan-German Chamber of Commerce Astori emphasized that Uruguay is committed to integration with the world through what he has long described as “open regionalism”, in which Mercosur does not turn into an obstacle for the development of country members but “rather an indispensable tool”.

Expanding on the ‘unfulfilled agenda’ Astori mentioned some of the objectives agreed 20 years ago but which remain in the drawing board: there is no free access to the expanded (regional) market and non tariff obstacles are greater than in the past; there is no coordination of macroeconomic policies but rather strong asymmetries in the capacity of the different countries to stimulate their own productions; there is no “deep discrimination” of members in favour of the block; virtually no out of the region agreements have been reached and finally he warned about a “serious institutional deterioration” and the lack of supra-national bodies in Mercosur.

Nevertheless this should not be an impediment to achieve a trade agreement with the EU. “We must keep advancing in two fronts, closely related to each other, because reaching the objective of a trade agreement with the EU, will also help Mercosur, I would add very much, to better function”.

Furthermore the agreement is ‘absolutely essential’ because “it will be decisive in helping balance forces inside Mercosur”.

Astori added it would not be reasonable to expect Mercosur problems to be solved in the short term, since countries that did not fulfil commitments “also have their necessities and domestic commitments. We must accept this as a fact of life that will change gradually” and appealed to patience because “Uruguay can’t ignore Mercosur”.

Nevertheless Astori insisted that in the meantime a proposal was needed to enforce ‘open regionalism’ in the block. “When the agreed collective agenda is not available, let’s open so that the smaller countries can reach accords with third parties out of the region”.

Víctor Kilma president of the Argentine-German chamber of commerce, also a guest at the Montevideo meeting, pointed out that South America must be more committed to integration, and sometimes “businesses must show the way”.

Kilma who is also Argentina’s Volkswagen CEO invited businessmen to follow the integration path adopted by Germany’ Volkswagen in Mercosur, which has complementary assembly plants and auto parts suppliers in Mercosur member countries.

“Sometimes government actions in electoral times are difficult to understand (such as the non automatic import licences implemented by Argentina) but overall policies in Mercosur four-member countries are clearly committed to regional integration”, added Volkswagen CEO.

But he also recalled that while in the EU, 75% is intra trade in Mercosur it barely reached 25%: “the possibilities of this great trade space are decisively misspent”.