ALADI’s Secretary General affirms that the Mercosur – EU agreement will not materialize in the short term

The agreement between the Southern Common Market (Mercosur) and the European Union (EU) is not going to materialize soon because the northern region has other priorities, the secretary general of the Latin American Integration Association (ALADI), Sergio Abreu, told Sputnik.

“I don’t see it [the agreement] coming to fruition. I’m not seeing it. It’s been over 25 years since a treaty of cooperation, trade, and political coordination was agreed, and it hasn’t been signed.”

“Mercosur is the only bloc that has not had an important signature with key markets,” said Abreu.

He was Uruguay’s foreign minister from 1993-1995 and participated in the early negotiations with the EU.

Abreu, Minister of Industry between 2000-2002, considered Mercosur “not a priority” for the EU, which has migration, China, the US, and the Silk Road as its most important issues.

“Mercosur is very important because of its resources.”

“But for a bloc to tell you that it is not going to finish negotiations because of an environmental sustainability issue in the Amazon may be reasonable, but it is not understandable.”

“China, US, and Europe are the main polluters in the world, and now those who want to get out of this situation are the victims of a policy that they should have faced many years ago”, he added.

Both blocs signed such an agreement in June 2019, two decades after the start of negotiations.

Still, it has not yet entered into force because it requires ratification by all member countries, and there are diverse positions within the EU.

In early October 2020, the European Parliament voted against ratification of the negotiated treaty due to doubts about the environmental commitments and safeguards contained in the text.

In October 2019, France announced it would not sign the treaty arguing that Brazil “does not respect the Amazon rainforest” or the Paris Agreement against climate change.

Abreu said that a possible FTA between Mercosur and China has to be analyzed carefully because it may harm micro and small entrepreneurs.

“I don’t know if it is the most important thing (a Mercosur-China FTA).”

“China is the main partner beyond Paraguay. It is a more strategic issue (…) There are much more serious issues in all this.”

“It is the issue of fishing, pollution, and depredation of resources. China has interests in its fishing fleet.”

“We have to see the agreement and how it develops.”

“The more the large production chains come, the more the small and medium-sized business people will be left by the wayside”. Who negotiates?

He also considered that as long as the region does not have a common policy, China’s “strategic patience” will continue to advance.

“What is the solution we have as a continent for people who do not work if we have 70% of informal workers? ”

“If the bloc is not strengthened, we cannot negotiate with one shoe on and the other barefoot, which is poverty, because not only do they not negotiate, but they take our shoe off,” said Abreu.

He stated that an FTA between Mercosur and China is related to the issue of infrastructure investments.

“China is part of the BRICS [Brazil, Russia, India, China, and South Africa].”

“It has a BRICS bank, and China, with a legitimate position, says it will try to invest what it can to have a greater strategic partner in the future.”

“You have to see a country with 1.3 billion inhabitants, which does not change its strategy and is the main exporter in the world.”

“What do we do? Does alignment or non-alignment correspond, having relations with everyone?” he wondered.

In a visit to Montevideo at the end of January, Brazilian President Luiz Inácio Lula da Silva said he was also willing to “talk” with the Asian giant about an agreement for which Uruguay had been negotiating individually for some time and which generated tensions with the other members of the bloc: Argentina, Brazil, and Paraguay.

In an interview with Sputnik, the director of the Mercosur department of the Brazilian Foreign Ministry, Francisco Cannabrava, affirmed that Uruguay is a “tremendously important partner” and indicated that eventual negotiations with Beijing as a bloc could focus on energy issues.

In late April, the Uruguayan press reported that China prefers to negotiate a free trade agreement as a group with Mercosur rather than with Uruguay individually.

“Paraguay needs reliable partners and to export with the same costs.”

Paraguay’s next government needs to ally with Uruguay, especially on the issue of the Paraná-Paraguay waterway, as it is landlocked, Abreu said.

“Paraguay needs reliable partners and to export with the same costs, and for that, it needs to have a partnership with Uruguay, which has the waterway terminal; something has to be done so that these small economies can close this social gap that every day is more distressing,” said Abreu.

Paraguay’s president-elect, Santiago Peña, met with Abreu.

The Aladi secretary said that Peña is a “young man with experience” because he was Minister of Finance and assured that he comes with a “very important enthusiasm”.

“For Paraguay and Bolivia, the Paraná-Paraguay waterway is key because they are landlocked.”

‘To get their products out, they have to use river transport, which is the least expensive.”

“The president told me that he wants to give life to the waterway to have fewer costs, that the shipping companies can navigate, that there is a complete damming, that they can navigate 24 hours a day and give agility to the ports”, he added.

He maintained that Peña wants to boost the Southern Common Market (Mercosur) and intends to make the bloc “sincere” to trade without difficulties.

“I put myself in the position of the president of Paraguay; how do I do it for the coming times, how to manage economic asymmetries? A large country makes its interests prevail,” he reflected.

The Paraguay River is one of the main components of the Paraguay-Paraná waterway, a regional integration system of high logistic and strategic value.

It constitutes a fundamental route for the performance of national foreign trade, given that the volume transported through this river corridor represents around 80% of the country’s imports and exports.

Argentina proposed the application of a toll for the international transit of cargo vessels in the section of the Paraná River between the port of Santa Fe and the confluence with the Paraguay River, which has generated disagreements with the government of Asunción.

Local press reported that the National Commission of the Paraguay-Parana Waterway would again meet this Wednesday and Thursday to continue examining Argentina’s arguments for charging a toll.

With information from Sputnik

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