MercoPress. South Atlantic News Agency

Mercosur/Pacific Alliance agree on flexible integration but no talk on tariffs

“It is not realistic to insist with a tariffs integration at this stage, but yes we can advance in other areas”, said Bachelet

Mercosur and the Pacific Alliance explored this week in Chile the possibilities of a gradual, and flexible, integration but left aside all possibility of a near future agreement on tariffs.

 In this second ministerial meeting in a month, (the first was in Colombia), Mercosur members Argentina, Brazil, Paraguay, Uruguay and Venezuela, and with a market protection emphasis, exchanged ideas with Pacific Alliance members Chile, Peru, Colombia and Mexico, which has an open market policy, as to how overcome mistrusts and advance in possible integration in different fields.

“We must once and for all brush aside prejudice about two alleged opposing and competing blocks which do not dialogue among themselves”, was the message from host and organizer of the meeting, Chilean president Michelle Bachelet.

“Although Mercosur and the Pacific Alliance are geared by different economic models and different ways of insertion in the global economy, they are two essential components, which with a gradual pragmatic convergence, would represent significant benefits all country members of each group”, underlined Chilean foreign minister Heraldo Muñoz.

However, “we know it won't be an easy task and we are not looking for outsized expectations”.

Currently discussions are centered in a gradual and flexible advance in areas such a people's movement, energy and infrastructure integration, among other issues, according to the participants of the meeting.

In a pragmatic approach, Brazilian foreign minister Luiz Alberto Figuereido said they are “two processes that complement each other, which are after something very similar and that is integration”.

While the Alliance, created in 2011, agreed to cut tariffs on over 90% of goods traded among its members, Mercosur has a common flexible external tariff, which can reach 35%, but with free circulation of goods and services among member countries.

“It is not realistic to insist with a tariffs integration at this stage, but yes we can advance in other areas”, said Bachelet.

“Digitalization of customs procedures, free movement of people, power inter connection and the internalization of small and medium companies are some of the potential areas of convergence among the two groups”.

“The idea is to take advantage of natural conditions of Latin America to increase trade with Asia, the region most interested in the commodities from Latin America”, added minister Muñoz.

“Our bi-oceanic condition is a strategic advantage” said the Chilean official.

However there was a dissenting point from Argentina, the third largest economy from the region, emphasizing on the need for Latin America to create strong industries.

“We can't continue to be simply providers of commodities; there must be an industrialization input”, underlined Argentina's Hector Timerman.