Brazil and Uruguay say they are “very much in agreement” on Mercosur modernization

RIO DE JANEIRO, BRAZIL – The foreign ministers of Uruguay, Francisco Bustillo, and Brazil, Carlos França, said Tuesday they are “very much in agreement” to move forward with the process of “modernization” of the Southern Common Market (Mercosur), already under discussion, which would include a reduction in the common external tariff.

The ministers made this announcement to the press after holding a working session that lasted nearly four hours as part of França’s official visit to the Uruguayan Foreign Ministry.

The meeting, during which the two foreign ministers discussed the bilateral and regional agenda, was described by França as “positive.” He stressed that the meeting took place in an “excellent climate” and with many points of agreement on the issues discussed.

Regarding the modernization of Mercosur, which includes Uruguay and Brazil, in addition to Argentina and Paraguay, the South American giant’s foreign minister said it remains on track.

“We continue to work with confidence, awareness, and consensus to modernize and promote Mercosur,” he said, adding that the proposal’s implementation by which Uruguay did not support the tariff reduction discussed at the last Mercosur six-month summit “is not yet complete.”

According to Bustillo, Uruguay, which tied its support for the EU’s Common External Tariff (GATT) cut to an easing that would allow it to negotiate a free trade agreement with China, needs more negotiations.

“We need a little more work, a little more agreement. We’ve had them, and they’ve been good, but I think we need to let a few hours go by, land some of the many issues we’ve talked about, and see how we can have that final meeting,” he said.

Bustillo said he was “optimistic” because Uruguay and Brazil have “a common destiny,” and it’s just a matter of moving toward it.

At the bilateral level, França stressed that the countries have agreed at the political level to be “open” on issues of “neighborliness” on their borders and stressed the importance of the realization of the planned waterway project in the Merín Lagoon between the Uruguayan department of Rocha (southeast) and the Brazilian state of Rio Grande do Sul.

“We also talked about the electricity issue, where we can make great progress. I believe that (electric energy) is a critical export product of Uruguay to Brazil. We can try to make sure that this is not a one-time event but can continue over time,” the Brazilian said.

França then visited the headquarters of the Latin American Integration Association (Aladi), where he met with its secretary-general, Uruguayan Sergio Abreu.

According to the former foreign minister, Brazil will play a central role in Aladi’s trade recovery efforts, focusing on helping small and large businesses affected by the pandemic.

“Brazil is starting to realize that it has the tools to do this. We need the political will to reach out to the most vulnerable,” he concluded.

THE SOUTH AMERICAN TRADE BLOC

Mercosur, officially Southern Common Market, is a South American trade bloc established by the Treaty of Asunción in 1991 and the Protocol of Ouro Preto in 1994. Its full members are Argentina, Brazil, Paraguay, and Uruguay. Venezuela is a full member but has been suspended since 1 December 2016. Associate countries are Bolivia, Chile, Colombia, Ecuador, Guyana, Peru, and Suriname.

Mercosur aims to promote free trade and the fluid movement of goods, people, and currency. Since its foundation, Mercosur’s functions have been updated and amended many times; it currently confines itself to a customs union. There is free intra-zone trade and a common trade policy between member countries.

In 2019, the Mercosur had generated a nominal gross domestic product (GDP) of around 4.6 trillion US dollars, placing the bloc as the 5th largest economy in the world. The bloc ranks high on the human development index. It has signed free trade agreements with Israel, Egypt, Japan, and the European Union, among others.

With information from EFE