
The Economist in its latest edition has a two-chapter piece on trade restrictions imposed by South America’s two biggest economies. The first (“Keep Out”) refers to Argentina and the second (“A self made siege’) to Brazil.

Uruguay is reconsidering the situation and links with Mercosur, given the recent trade obstacles and tariffs imposed by Mercosur senior partners Brazil and Argentina, announced President Jose Mujica in an interview.

Uruguayan president Jose Mujica admitted a certain ‘stinging feeling’ following the recent Brazilian decision to increase import taxes on vehicles by 30%, which could also have an impact on Mercosur partners.

Mercosur coordinators are holding meetings in Montevideo to decide on a mechanism for temporary increases of national tariffs besides those already implemented under the common external tariff for the group.

The Brazilian government displayed this weekend thousands of troops with air support along the borders with Argentina, Paraguay and Uruguay in a concerted effort to combat organized crime.

In twelve years Mercosur has consolidated as the leading region in soybean production with 52% of the world crop and the potential to further expand area and yields.

President Jose Mujica admitted to Uruguayan manufacturers and farmers that with recurrent Argentine and Brazilian obstacles to trade “it’s very hard to make Mercosur function” and good relations between presidents “are not enough”.

The Paraguayan delegation before Mercosur Parliament, Parlasur, accused Argentina of “systematically and permanently ignoring the Asuncion Treaty” (the founding charter of Mercosur).

Argentina is considering a temporary increase of tariffs on some imports, following on Brazil’s steps, but is also thinking of a formal proposal to its Mercosur partners.

Mercosur and Mexico signed an agreement which virtually liberates all bilateral auto industry trade and opens prospects for joint undertakings world wide. The event took place in Montevideo, administrative capital of Mercosur.