INTEGRATION: Mercosur Takes on New Dimensions

By Mario Osava Reprint | | Print |

Mario Osava

FORTALEZA, Brazil, Dec 17 1996 (IPS) - The Southern Cone Common Market (Mercosur) took a new partner, Bolivia, and greater social dimensions with the signing of several agreements in Fortaleza, Northeast Brazil, Tuesday.

However, a union demonstration called by the Union Centres of the Southern Cone showed worker discontent with the unemployment which has accompanied the globalisation of national economies and the integration process.

Earlier in the day, a civil service protest against the “voluntary redundancies” and Brazilian government administrative reform was harshly put down by the local police, causing a street fight near where the presidents were meeting.

However, the demonstrations did not affect the summit.

Bolivia will join the free trade zone in April, under similar conditions to Chile, without becoming part of the customs union formed by Argentina, Brazil, Paraguay and Uruguay.

The agreement was threatened by discrepancies over Bolivia’s wheat flour exports. Argentina, the main campaigner for tax deductions, fought for a preference which was finally fixed at 20 percent for the first five years and 30 percent in the following five.

From now on, the Mercosur consumers will have common rights, including taking legal action against the producers of goods from other nations in the bloc.

The advances in integration, formalised in Fortaleza, will change citizens’ lives for the better, as all the members, plus Chile and Bolivia, will have an improved sub-regional flights network, saving both time and money.

This agreement means, for example, that someone from Cordoba, Argentina, will be able to fly direct to Belo Horizonte, in central Brazil, without having to pass through Buenos Aires and Sao Paulo. The first two cities have a great deal of interaction as they are both site of Fiat factories.

However, consensus was not achieved on interconnecting pension plans, where it was proposed that a person who wishes to retire can add up the years of contributions paid in the various member nations.

Two important protocols, unifying rules on the defence of competition and the application of commercial safeguards, were especially opposed by Argentina, but the objections were overcome by imposing a transition period until 2001.

The Fortaleza Summit also agreed to fix the headquarters of the Mercosur in Montevideo, naming the Uruguayan Jorge Fernandez Reyes as secretary.

The push to share norms and initiatives was also seen in the approval of an Argentine proposal for the armed forces of all the nations to participate in peace missions, with a “white helmets” division.

In his speech, Brazil’s President Fernando Henrique Cardoso stressed the Mercosur nations “must all act together” taking a common stance in the international fora, as they did in the World Trade Organisation (WTO) in Singapore last week.

They must be “closer together every day” not to give a greater advantage to the other regional blocs, he said, after criticising the protectionism practiced by the rich countries.

Cardoso said trade had trebled within the Mercosur in five years, reaching 15 billion dollars in 1995, while interaction with the rest of the world increased from 29 to 55 billion – proving this is a system of open regionalisation.

But the Mercosur logo, chosen following a contest last month and officialised at the Summit, was criticised for using the Southern Cross – a constellation in the southern sky – as a symbol, for it has only four-stars and does not allow for increased membership.

Cardoso himself caused some controversy when he said that from now on, the Mercosur negotiations with the Andean Community would be carried out country by country.

“It is difficult to negotiate together, because the Andeans have more internal inequalities,” he said, contradicting previous declarations of inter-bloc agreements.