MercoPress. South Atlantic News Agency

Brazil offers Paraguay Mercosur chair, but apparently Argentina is not convinced

Dilma trying to convince Cartes Paraguay must return to Mercosur

Brazil offered Paraguay the rotating chair of Mercosur as of next December, as part of an overall understanding to have the landlocked country return to the block, while accepting the incorporation of Venezuela as a full member of the group. Paraguay rejects Venezuela’s membership alleging it was done against the will of its Senate and in breach of national and international law and of the Mercosur charter.

The news was published in O Estado de Sao Paulo following the recent visit of President Horacio Cartes to Brazil to meet with Dilma Rousseff, and is seen as a gesture towards Paraguay and a possible mechanism to avoid all the legal inconsistencies questioned by Asunción.

The information was provided to the newspaper by a minister from Rousseff cabinet and close to the negotiations.

However O Estado also points out that the pro tempore chair of Mercosur as of next December is still under discussion with the other group’s members particularly Argentina which is entitled to the post based on alphabetical order, after Venezuela’s time is over.

“The spirit of Venezuela is not to make any claims. Venezuela is the main source of friction with Paraguay, and Caracas wants to overcome the discrepancies and its incorporation to Mercosur which still requires the formal approval of the Paraguayan congress, which is something Cartes must negotiate with the political system” says O Estado.

And in this deal the greatest problem “is Argentina which is not willing to lose its turn in presiding over Mercosur to Paraguay”.

The Sao Paulo daily also points out that a minister close to President Cartes said that Asuncion is planning the return of Paraguay to Mercosur by the end of the year and the offer from Rousseff provides an important negotiation element with Congress, so that it finally agrees to approve the incorporation of Venezuela as full member of Mercosur”.

O Estado underlines that during the whole of the one day state visit of Cartes, President Rousseff insisted in the significance of the return of Paraguay to Mercosur, and the strategic relevance of Paraguay for Brazil.

“Brazil is totally interested in the return of Paraguay and the fact that our bilateral relation, as can be seen has remained intact”, Rousseff pressed on the Paraguayan delegation.

“El Universal” from Caracas echoed the Brazilian proposal to Paraguay. “Expectations are that if Paraguay accepts, it will become the chair of Mercosur next December when the group celebrates its six-month meeting in Caracas”.-

“During their private conversation Rousseff insisted on Cartes the importance of Paraguay’s full return to Mercosur and Unasur”, said El Universal.

Paraguay is taking its time and has been reluctant to accept the full return to Mercosur of which it argues it never abandoned, but insists that the decision of the Paraguayan Senate must be respected as well as the charter of Mercosur and international law.

Landlocked Paraguay is also trying to diversity its foreign trade and opportunities and has become an observer of the Pacific Alliance. The latest foreign trade figures from a Paraguayan economics think tank show that the European Union in the first eight months of the year absorbed 25% of exports, up 56% from a year earlier, while Mercosur ranks second with 19% and a 33% increase. This is followed by Russia with 13% and a 14% increase.

Brazil is urged because it has pledged to the EU that in the fourth quarter Mercosur would be presenting its proposal to advance in the trade and cooperation talks, stalled because of political events on both sides.

Besides Brazil as of next January will be losing tariff advantages for some of its exports to the EU, but needs a compact or at least organized Mercosur block to negotiate, (which includes Paraguay), unless it opts with Uruguay to a two speed approach, leaving aside Argentina consumed by politics and its policy to support local manufacturing and its domestic market.