RIO DE JANEIRO, BRAZIL – Argentina’s decision to withdraw from further trade agreements with third countries under Mercosur at this time has been interpreted by some partner countries as a break with the economic bloc.
Argentinian President Alberto Fernández has now refuted this. In a telephone conversation with his Uruguayan counterpart, Luis Alberto Lacalle Pou, he made it clear that, in fact, he was in favor of an extended Southern Cone Common Market, the Mercosur.
“The decision is not to leave Mercosur, but to make it bigger, with more members,” he stressed in the conversation.
The inclusion of more countries in the alliance would improve its negotiating position when dealing with other economic blocs after the Covid-19 pandemic, Fernández said.
He also hoped that Mercosur would return to its “original identity” as a regional integration instrument and extend it to the whole of Latin America.
The two heads of state agreed to develop a Mercosur agenda aimed at correcting the region’s disparities. They further discussed the impact of the Covid-19 pandemic and agreed to strengthen health cooperation between their neighbouring countries.
The day before, Fernández had criticised both his predecessor Mauricio Macri and Brazil’s President Jair Bolsonaro, for having individually entered into free trade agreements.
The Macri government had allowed the spirit of the alliance to be warped: “If everyone can negotiate for themselves, what is Mercosur for?” Fernández asked. His criticism referred, among other things, to a trade agreement that Brazil signed with the US in November 2019.
It provides for a duty-free import quota of 750,000 tons of wheat per year, which conflicts with the Mercosur agreements and ultimately undermines the regional alliance, but benefits the US and Brazil.
Argentina’s withdrawal from further negotiations with third countries was due to talks with Canada, South Korea, Singapore and Lebanon, which are being conducted by the other Mercosur member states.
However, the agreements with the European Union and the EFTA (Switzerland, Norway, Liechtenstein and Iceland) are not affected. Fernández justified his government’s decision with the current dire economic situation, which does not allow any further free trade agreements with his country.
In addition, it would be wiser to wait and see what impact the Covid-19 pandemic will have on global trade.
Argentina, Uruguay, Brazil and Paraguay formed the Mercosur economic and integration alliance in 1991. Venezuela later joined, but was permanently suspended in December 2016 for political reasons.