MercoPress. South Atlantic News Agency

Mercosur expected to announce dropping of roaming charges in Santa Fe

Consumers in any of the four member countries will be able to use their cell phones in any of the other member countries without having to pay extra.

The presidents of Argentina, Brazil, Paraguay and Uruguay are expected to announce Wednesday the elimination of the roaming service charge when travelling to any of the Mercosur countries, it was reported.

Wednesday's summit in the Argentine city of Santa Fe will be the first since the signing of the agreement with the European Union (EU).

Consumers of any of the four countries will be able to use their cell phones in any of the other countries without having to pay extra, as it happens among the members of the EU, the reports added.

However, the measure would still have to be ratified by each national parliament.

“It will be a congratulatory summit,” according to sources of the Brazilian government, which is to take over the bloc's rotating presidency from Argentina.

Invigorated by the pact announced two weeks ago with Brussels, Mercosur wants to reach a similar one next month with the European Free Trade Association (EFTA) and seeks to close others with Canada, Singapore and South Korea.

The summit aims to show that “another Mercosur” dawns and Santa Fe will issue the mandate to make its operations more flexible, to reduce common customs tariffs and eliminate the veto power against bilateral agreements any of the members might reach.

Also on the table will be the crisis in Venezuela, which was separated from the bloc in 2017.

The summit will be attended by Presidents Sebastián Piñera of Chile, who presides over the Pacific Alliance, another powerful trade bloc, and Evo Morales of Bolivia, a Mercosur associate member seeking full allegiance.

The EU-Mercosur association was reached after 20 years of on-and-off negotiations at a time when Argentina and Brazil, the major partners of the South American bloc, are in the hands of more open and liberal governments than their predecessors.

The administration of Brazili's Jair Bolsonaro “is really embarking on a change of model,” said special secretary for Foreign Trade, Marcos Troyjo; one of the brokers of the Brussels.

“All the boats are on top of this beautiful wave of commerce,” he said at an audio conference at the Atlantic Council in Washington.

The agreement was interpreted as a transatlantic response to the aggressive protectionist policy of US President Donald Trump.

Troyjo recalled that after taking office in January, Bolsonaro promised business “without taking into account the ideological differences.”

“We had the good fortune ... to have President Mauricio Macri in Argentina who also wants the agreement to move forward and with whom we also have similar ways of seeing the problems of the region,” he added.

This coincidence helped even the Uruguayan government that for years sought a more open Mercosur but clashed with the reticence of the two major partners. The delegations of Argentina and Brazil “had a bias more prone to the agreement than the previous ones,” said Foreign Minister Rodolfo Nin Novoa. The negotiators from Brazil “even helped us with some issues,” he added.

The association of both blocs will give way to a market of 780 million consumers that will represent a quarter of world's GDP. The agreement is the largest reached by the EU with another bloc and the first of Mercosur since its creation in 1991.

Once it enters into force, 91% of Mercosur tariffs and duties will be phased out gradually in up to 15 years for European products and the EU will do the same with 92% of its own in 10 years.

However, the agreement must still be ratified by the European Parliament and by legislatures of each of the 28 EU countries and the four of Mercosur, a process which could take up to two more years.

For now, Europe faces strong pressures from agricultural sectors in countries such as France and Ireland, which have historically rejected competition from Mercosur. In addition, as Brexit is still pending which, if materialised, would leave the United KingdomGreat out of the agreement.

On the South American end things are not easy either since presidential elections in October both in Argentina and Uruguay could the course of events.

Argentine frontrunner Alberto Fernández, whose running mate is former President Cristina Kirchner, said the agreement was announced “hastily” to benefit Macri, who is seeking reelection amid a neverending economic crisis.

“If the agreement is what we suppose it is, which is that we once again sell primary products and they sell us industrial products, [then] that we will have to review without any doubt,” said Fernandez, who leads the polls slightly ahead of Macri.

Other analysts believe that even if Fernández becomes president, the country would have no way but to stay within the alliance or risk losing the entire highly profitable Brazilian market.