MercoPress. South Atlantic News Agency

Uruguay ‘can’t ignore (Mercosur) reality’ and is applying for full Pacific Alliance membership

Mercosur inactivity is virtually total said acting president Danilo Astori

Vice-president and acting president Danilo Astori strongly defended the Uruguayan government’s intention of joining the Pacific Alliance, next to Chile, Colombia, Peru and Mexico, claiming that Mercosur has fallen into a state of ‘inactivity’ but also rejected point blank statements from Brazilian diplomacy contrary to such a move.

“At the moment we have observer state status but we pretend to become as soon as possible candidate for full membership of the Pacific Alliance, and hopefully this can be achieved very soon”, said Astori who is currently acting president since Jose Mujica is visiting Spain.

”Our objective is to further diversify Uruguay’s international insertion, physically a small country but with a great potential”, added Astori who represented Uruguay at the recent Pacific Alliance summit in Colombia at the end of May.

Astori indicated that Uruguay views the new block as “a project with greater integration potential” since those countries are more open and have “a coverage of foreign links that is far broader”, besides the fact that they are targeting a region that is “the principal factor in world trade and investment co-relations which is Asia Pacific”.

The acting president supported his argument saying that 38% of Uruguay’s global trade is with that block and with the non-American countries of the Pacific, “which is undoubtedly a very high percentage”.

Astori also recalled that Uruguay already has a free trade agreement with Mexico, and with Chile, Peru and Colombia through Mercosur, the Atlantic block made up of Argentina, Brazil, Paraguay, Uruguay and the latest incorporation Venezuela.

Mercosur has been stalled for years with growing claims from junior partners Paraguay and Uruguay against protectionist and market access selective policies implemented by Argentina, but also by Brazil.

“That is why I am absolutely in disaccord with recent statements from Brazil’s high representative before Mercosur, Ivan Ramalho”, who argued that Mercosur members can only negotiate “as a block” with the Pacific alliance underlined Astori.

He added Uruguay is “a sovereign country that can define by itself its international insertion policy”.

However Astori admitted that for Uruguay Mercosur is essential since ‘any country must begin integrating with its neighbours’ and ‘we can’t ignore reality which is showing us the impossibility of this block to have common economic policies”.

He mentioned as an example the parallel dollar or ‘blue’ market in Argentina, ‘a sovereign decision’ from the government of President Cristina Fernandez, but which not only is distorting Argentina, ‘but also Uruguay’.

Astori recalled that the founding Mercosur charter (1991) was ‘extremely ambitious’, since it anticipated a free trade zone and a customs union, and also a common market, but two decades later, ‘reality is quite different’.

“We never made it to the common market, the customs union it totally destroyed and the free trade zone is not working because there is no free transit of goods and services. Mercosur is in a state of inactivity, virtually total”, underlined Astori.

“As I have said in repeated occasions, relations of Uruguay with Argentina are going through their worst moment in years” in the trade, economic, and infrastructure cooperation fields” added the acting president.

This does not mean at all confrontation with Argentina, “it means acknowledging reality and that the only road to address the situation is not squabbling, rather to continue working but not impeding Uruguay to look for other options”.

According to the UN Economic Committee for Latinamerica and the Caribbean the four members of the Pacific Alliance last year expanded on average 5% which is above the region’s average of 3% and Mercosur 3%.