MercoPress. South Atlantic News Agency

Uruguay does not sign joint declaration at Mercosur Summit

At the two previous summits, Presidents Bolsonaro and Abdo Benítez had joined Lacalle Pou in calling for Mercosur to modify its rules to make it more flexible.

Uruguay stood out for its dissenting stance at the 59th Summit of the Common Market of the South (Mercosur) Friday after President Luis Lacalle Pou refused to sign a joint declaration.

Speeches from the leaders of Argentina, Brazil, and Paraguay, agreed on a call for unity, but differences prevailed during the virtual encounter where the heads of state also bid farewell to Chile's President Sebastián Piñera who made his last appearance at the regional bloc of which Chile is an associate member.

In the two previous summits, Presidents Jair Bolsonaro (Brazil), Mario Abdo Benítez (Paraguay) had joined Lacalle Pou in his demand that Mercosur modified its rules so that each country can seek one-on-one trade deals with other countries or blocs, which Argentine President Alberto Fernández opposed, on the grounds that it jeopardized Mercosur's existence.

Argentina was also against a reduction in common external tariffs (CET) but this issued was worked out with Bolsonaro over the past few months.

During a Summit in March, Fernández told Lacalle that if Mercosur was so much of a burden for Uruguay then it should better ride a different boat. By July's Summit Lacalle Pou announced Uruguay would seek unilateral trade deals, particularly with China, despite Mercosur's rules against such a move. Bolsonaro supported him, but Fernández recalled then that these types of decisions had to be voted unanimously.

A month later, Fernández and Lacalle Pou met in Buenos Aires to appease tensions, which apparently was achieved. Friday's final statement only addressed the CET but there was no mention to Uruguay's request to make the group's rules more flexible.

During Friday's meeting Bolsonaro handed over the pro tempore presidency of Mercosur to Abdo Benítez, regretted that under him the CET reduction had not been agreed upon despite Brazil's change of mind and current willingness to accept it.

“This reduction will continue to be a priority on our agenda,” he said, promising that the 10% cut in tariffs on Brazilian imports that he announced last week is “exceptional and temporary.”

Bolsonaro also highlighted that despite the COVID-19 pandemic, Mercosur maintained open negotiations with the European Union, Canada, South Korea, Singapore and Lebanon, while talks with Vietnam and countries in Central America and the Caribbean are coming up.

Abdo Benítez insisted the CET will be the priority of his presidency, but through the preservation of a common commercial policy. “Mercosur has multiplied trade between its partners more than 12 times in 30 years, even in a pandemic it represented 64% of Paraguay's exports and 35% of our global trade,” Abdo stressed.

Lacalle Pou warned that he would not go back to detail his agenda around the bloc, but considered that, beyond the differences, something positive was the honesty of the positions of each of the member countries. ”Our country did not see in this modernization process all of its interests satisfied, we have a vocation to belong to Mercosur, asa much as we have to talk about prosperity and freedom, and that prosperity obviously generates certain tensions between national interests, we must also reach a middle ground (...) we are optimistic, the world needs our products and the intelligence of our compatriots.“ From his words, it was clear Uruguay did not intend to leave the regional bloc.

Fernández stressed there was a greater bargaining capacity if the bloc worked collectively and that the key was to open relevant markets without assuming obligations that are impossible to fulfill. ”Different political signs do not prevent us from improving the common infrastructure, or thinking about a fairer and more modern future. Against all pessimistic forecasts, Mercosur is the result of the best policy,” the Argentine leader said.