MercoPress. South Atlantic News Agency

Uruguay industries lobby questions the growing “political” predominance in Mercosur

Venezuela’s inclusion: what are the real advantages for Uruguayan trade and integration asks CIU

The ‘new’ Mercosur with Venezuela as a full member reinforces the regional block as a forum of ‘political understanding’ and no longer as an integration process ruled by international law.

So it can be read in a document form the Uruguayan Chamber of Industries Department of Integration and International trade, CIU, which analyzes the latest Mercosur presidential summit held in Mendoza, Argentina last 28/29 June where it was decided to include Venezuela.

The CIU report argues that the Mendoza summit resolutions had the interventions of three of the four full members, which questions the validity of those resolutions and recalls that “article 37 from the Ouro Preto protocol states that decisions by the different bodies of Mercosur must be adopted by consensus and with the presence of all the State parties”.

Following an analysis of the sanction process imposed on Paraguay, CIU says that the suspension of that country from Mercosur “seems to have no return and according to events, there is little probability for such a situation to change” before the presidential elections scheduled for April 2013.

Paraguay was suspended from Mercosur following the removal of Fernando Lugo as president and his replacement by Vice president Federico Franco by the country’s congress based on a political impeachment.

Regarding the incorporation of Venezuela, the CIU report recalls that in the previous summit December 2011 in Montevideo, Uruguay was already considering a mechanism which would avoid the objections of the Paraguayan congress, the only legislative which was still pending ratification of Venezuela’s inclusion.

This week the current President Franco sent the Venezuela protocol of adhesion to Mercosur to the Senate for its consideration.

Given this background it is surprising the attitude adopted by President Jose Mujica in the Mendoza summit, points out the document adding that Uruguay’s position regarding Venezuela’s inclusion in Mercosur “implies a twist from the principles that have always guided the country’s international policy”.

As it was specifically acknowledged by the presidents involved in the decision, in this case the political was ahead of the juridical, ignoring original Mercosur treaties. “This unprecedented event and given its seriousness could mean a new focus to the integration process (which does not mean dismantling what has been achieved so far) and transforms it more into a forum of political understanding and no longer a process of integration ruled by instruments of private international law”, argues CIU.

As to what Venezuela in the Mercosur could mean for Uruguay, the manufacturers’ lobby is not convinced that “necessarily trade relations are to improve”.

“Uruguay already has tariff advantages both in the framework of Mercosur with the Andean Community of Nations and with the partial accord on economic complementation that covers most of Uruguay’s exports to Venezuela”.

However there could be improvements in the case of a dismantling of non tariff restrictions implemented by Venezuela but “taking into account the current situation in Mercosur and particularly the attitude from the rest of the block’s members in what refers to that sort of measures, certain difficulties can be anticipated for Venezuela to effectively comply with what is notoriously ignored by the other members of Mercosur”.

According to CIU the political weight acknowledged to Venezuela, the significance of the trade relations of that country with the senior members of Mercosur and the energy deals of President Chavez with Brazil “can easily advance what Venezuela’s priorities will be following the inclusion”. CIU then warns about the consequences of the Uruguayan position against Paraguay, “which were evident in the unrestricted support for Venezuela’s incorporation at any cost, and which naturally will distance a strategic partner for Uruguay”.

The CIU report states that the full impact of Venezuela’s incorporation to Mercosur will much depend on the attitude of President Chavez if he wins the coming elections. “His confrontational style and positions in foreign policy could affect Mercosur international relations and more specifically its strategy of external insertion. The current EU/Mercosur negotiations could be an example of what awaits”, says CIU.

The manufacturers’ chamber also looks at Unasur, Union of South American Nations, and the brainchild of former Brazilian president Lula da Silva and which Chavez immediately embraced.

Mercosur is a trade accord, while Unasur a “political forum”, and the ever increasing links between the two organizations is “evidence how the presidents of Mercosur have given priority to the political over economics and trade”.

Finally the CIU comments the recent video-conference of the presidents from Argentina, Brazil and Uruguay with Wen Jiabao, China’s PM last June 25 when he toured the region. During the exchange the possibility of a strategic alliance of Mercosur with China was considered.

Paraguay was not present because it had been suspended but besides it has full diplomatic relations with Taiwan considered by Beijing a ‘rebel’ province and which it does not recognize as independent; another message for Paraguay from the other presidents?