Argentina and Brazil have again clashed not over football but over trade and Mercosur according to the Sao Paulo media. Brazil believes there is a lack of ambition from Argentina to finish polishing the proposal to be exchanged with the European Union for a much delayed cooperation and trade agreement.
Allegedly Brazil given the situation has a B plan, with the support from junior members Paraguay and Uruguay, and this would include a tariffs' reduction chronogram different for each member of Mercosur or even a 'two-speeds' trade block.
The issue came to light again following the visit of EC vice-president Antonio Tajani who recently toured Mercosur countries and said that the ball was now in the Mercosur pitch and insisted on the significance that the agreement has for the EU, despite all, Mercosur is the future.
We strongly favor the agreement but now the decision belongs to Mercosur and its own internal debate. Four different positions must be harmonized said Tajani.
According to the Brazilian B plan the flexibility would allow the administration of President Cristina Fernández to take more time and continue with its current policies promoting domestic industry and jobs.
However Argentina objected arguing that the Brazilian proposal of a different 'rhythm' of tariff reductions inside Mercosur is incompatible with the process of intensifying the block's integration.
According to the Sao Paulo media the main fear of the Argentine government is to be displaced or left out from the Brazilian market with the arrival of more competitive goods from Europe.
Argentina insists in a seven-year legal grace period before beginning to reduce tariffs on some imports. Under this option free trade among the two blocks, EU and Mercosur would only be reached in a 15 year-time period, points out the Brazilian media.
However EU diplomatic sources said that Argentina is well aware that the EU Mercosur agreement is important for them since they export more than they import and thus won't want to be left out. I'm optimistic that Argentina will ultimately join the wagon.