Lacalle Pou on MERCOSUR: Brazil “breached” consensus rule by lowering Common External Tariff

RIO DE JANEIRO, BRAZIL – President Luis Lacalle Pou spoke about the flexibilization of MERCOSUR and Uruguay’s position opposing the lowering of the Common External Tariff (CET). “When the Common External Tariff is lowered by Brazil it is not lowered, and that was the main discussion, the rules of consensus,” he said.

“MERCOSUR was created based on an operating method stating that ‘its four parties must be in agreement or else we will not move forward.’ Now this move by Brazil, later supported by other countries, there was no consensus. What does this mean? That the rule of consensus in MERCOSUR has lapsed or has been breached. We were willing to go along if the flexibilization were to be included. What are we entitled to do when the rules of consensus are breached? It enables us to move forward with the flexibilization,” the President added.

Brazil unilaterally decided to reduce the Common External Tariff on a number of products by 10%. Whilst backed by Argentina and Paraguay, decisions within the bloc are reached by consensus and Uruguay did not agree with this decision.

Lacalle reaffirmed that the flexibilization of the bloc is not a “whim” but rather a state policy that comes from the last four governments. “The difference is that we are moving forward,” he said. On Tuesday, Lacalle announced that talks have also begun with Turkey for a potential trade agreement.

On the other hand, the President said that he has good dialogue with the opposition but that “coincidences” in long term policies such as Free Trade Agreements are lacking.

“There is dialogue, with the unions and business chambers. There are not many coincidences. We should work a little harder there. The issue is that we were elected with a government program, with a commitment to the country, signed by five parties. We have to implement it,” he said.

He also made reference to the relationship he will have with the Frente Amplio chairman Fernando Pereira.

“I have a good relationship with Pereira from his position as chairman of the Pit-CNT and myself as President of the Republic. We had a good personal relationship that I am sure will continue with him chairing a party that represented 39% of Uruguayans in the first round of the last election. I believe that human relations are the essence. Even if we do not agree, the tone is the main thing,” he stated.