LATAM: Political Cohesion Eclipses Trade Conflicts in Mercosur Summit

By Marcela Valente Reprint | | Print |

Marcela Valente

PUERTO IGUAZU, Argentina, Jul 8 2004 (IPS) - The presidents of South America’s Mercosur countries demonstrated strong political cohesion and interest in integration that transcended trade differences like the one that emerged this week between Brazil and Argentina, threatening to tarnish Thursday’s summit meeting.

The XXVI summit of Mercosur (Southern Common Market) leaders in Puerto Iguazú, a city in the northeastern Argentine province of Misiones, brought together presidents Néstor Kirchner of Argentina, Luiz Inácio Lula da Silva of Brazil, Nicanor Duarte of Paraguay and Jorge Batlle of Uruguay.

Also present were the leaders of two of the bloc’s associate members – presidents Carlos Mesa of Bolivia and Ricardo Lagos of Chile – as well as a delegate of the government of Alejandro Toledo from Peru, the third associate.

President Hugo Chávez from Venezuela, accepted as the fourth associate member Thursday, and President Vicente Fox from Mexico, which began the process to become an associate, also took part as special guests.

The meeting, held ”at the geographic heart of Mercosur” in President Lula’s words, was marked by the move towards closer ties between the Southern Cone subregion and Mexico and Venezuela, progress with respect to relations with the European Union (EU), and measures aimed at strengthening institutional aspects of the bloc.

With regards to the bloc-to-bloc free trade agreement with the EU, which has been in negotiation for 10 years, Kirchner said it would be signed ”this year.”

At the opening of the meeting in this city on the border with Brazil, Kirchner said Mercosur is facing ”an enormous opportunity to set out on the route of a change of epoch” that would favour ”sustainable development with social equity” and ”a reduction in poverty and exclusion” through the integrated development of the region.

Unlike in the 1990s, when governments in the region followed policies aimed at the opening up of trade, the privatisation of public enterprises, and the adoption of other ”neo-liberal” reforms, the current administrations, especially the left-leaning governments of Kirchner and Lula, are focused on counteracting the negative consequences of the free-market model.

”That direction was mistaken, and we had to pay, and are still paying, enormous costs in terms of poverty, exclusion and the widening of the social gap,” Kirchner said in the address he delivered before turning over the rotating presidency of the bloc to Lula.

Paraguayan President Duarte backed Kirchner, underlining that ”if the social indicators of poverty and unemployment do not improve” in the subregion, ”not even the best customs union will be able to help consolidate our democracies.”

In an interview with IPS, Darío Alessandro, the Argentine official who heads Mercosur’s Political Consultation and Coordination Forum, described the bloc’s new political orientation.

”The wave of liberalisation of the 1990s was very strong. The only thing that mattered was to increase exports, and now we are seeing the adverse results: poverty, unemployment, and a huge foreign debt.”

In his view, the arrival of Lula in Brasilia and Kirchner in Buenos Aires brought a change similar to the one he hopes will occur in Uruguay, if the leftist Progressive Encounter-Broad Front (EP-FA) coalition wins the October general elections as expected.

”The presidents, especially those of Argentina, Brazil and Chile, agree on the need to move in the direction of becoming countries with a stronger focus on social questions, and have similar viewpoints on many issues,” said the official.

Alessandro defended Argentina’s measure to restrict imports of electronics goods from Brazil, announced on the eve of the summit, as necessary to move towards more diversified trade, in which every country, and ”not just one”, can develop their industries and generate quality jobs.

The announced restrictions on imports had apparently upset the Brazilian delegation. But on Thursday, Argentine Economy Minister Roberto Lavagna said ”there is no tension between the partners.”

”That was an exaggeration,” according to the minister.

Luis Beldi, spokesman for former Argentine president Eduardo Duhalde, the head of the Mercosur Commission of Permanent Representatives, commented to IPS that he had observed a climate of ”total harmony” among the foreign ministers of the Mercosur member and associate nations, and ”great cohesion” among the presidents, ”despite any differences that might exist.”

”The interest in integration stands above the political or ideological differences that might exist between them, because in that sense there is great pragmatism. They all know that they cannot do it alone,” said Beldi.