Last Friday in Brasilia, the heads of state from the Southern Common Market (Mercosur) bloc came together for the group’s 48th summit at Brazil’s Itamaraty Palace.
The meeting signalled the end of Brazilian President Dilma Rousseff’s tenure as the bloc’s pro-tempore president. Rotating leadership now passes to Paraguay’s Horacio Cartes for the next six months, the country’s first presidency since it was suspended following the controversial impeachment of former President Fernando Lugo in 2012.
“Free movement of goods, services and people,”
Mercosur, founded in 1991 to strengthen interregional trade and enable the free movement of goods, services and people between member states, is the world’s fourth-largest trading bloc.
Currently, Mercosur comprises some 275 million people with a GDP of $3.18 trillion, totalling 70 and 77 percent of South America respectively. The group is made up of six associate states and six full member states: Argentina, Brazil, Paraguay, Uruguay, Venezuela and now Bolivia.
One of the main decisions at the summit was to promote Bolivia from an associate state to full member as the group continues to push its mandate for greater regional integration.
The move still needs to be ratified by the national legislatures in Paraguay and Brazil, after counterparts in Argentina, Uruguay and Venezuela approved Bolivia’s entry, now considered somewhat of a formality.
The summit’s focus was on Mercosur’s primary function: strengthening its members’ collective economies. The leaders recognised the group’s success in recent years.
Dilma highlighted the bloc’s role in helping its members weather the worst effects of the recent financial crisis as well as growing trade 12 times within Mercosur since its founding, compared to five-fold increase in global growth over the same period.
Improved trade measures
Dilma also joined calls from other members for increased interregional trade to combat the economic slowdown experience by many Latin nations. One of the proposed steps for improved interregional trade, forwarded by Paraguay and Uruguay, is the removal of tariffs barriers.
Speaking to TeleSur, Paraguay’s Foreign Minister, Eladio Loizaga said, “the proposal is aimed at stimulating trade between member states amid ongoing international economic crisis”. Some Mercosur members, especially Argentina, have strict regulations inhibiting the ease of interregional trade.
In response, Mercosur leaders announced the group would implement a plan to reduce trade barriers over the next six months.
In a further measure to stimulate trade, Dilma also called on Mercosur’s need for new markets. Currently, the bloc’s constitution prohibits individual members from making trade agreements with other regional blocs. Talks regarding an agreement with European Union (EU) were previously delayed because of internal disagreements.
At the summit, however, the group announced a united plan to exchange offers with the EU by the end of this year. Dilma also hinted at trade with markets beyond Europe, naming South Korea, Tunisia, Lebanon and another regional trading bloc: the Pacific Alliance.
In recent years, with the rise of Pink Tide governments across the region, Mercosur has taken on a role beyond its original economic remit. The leftist political turn within the core governments constituting the sub-regional bloc, has resulted in the organisation being involved in more social and political causes.
At last week’s Mercosur summit, the group’s final statement joined the calls of outgoing Argentine President, Cristina Kirchner, for increased democracy within other international organisations; the UN was highlighting as an example where the five-strong Security Council holds veto powers over the larger body.
Mercosur also supported Argentina’s demand for international financiers to be held accountable to regulatory controls as well as criticizing a “lack of progress” in negotiations over the Malvinas (Falkland) islands.
Similarly, Mercosur reiterated its support for Venezuela in the ongoing saga with the United States which earlier this year placed the Latin nation on a sanctions list, labelling it an ‘extraordinary threat’ to its security.
With Bolivia’s admission as a full member, it is likely Mercosur will push for a solution between Chile and the landlocked Andean nation as it continues its legal proceeding to gain access to a seaport.
The leaders also heard from social groups as 600 representatives from different movements and countries had gathered in Brasilia to participate in the Social Summit of Mercosur. The group presented a final declaration directly to the leaders as part of the summit’s official closing.
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