Uruguay stirs up the Mercosur Group by seeking an external trade agreement
Uruguay has expressed its intention to seek a trade agreement outside the Southern Common Market, the main South American trading group, and threatened that the group will face a new crisis before Thursday’s presidential summit.
Uruguay said it will start bilateral trade negotiations with other countries after failing to reach agreement on lowering tariffs and facilitating deals with third parties at the preliminary meeting of foreign ministers on Wednesday. The agreement was strongly resisted by the left-wing government of Argentina.
Although Uruguay emphasizes that it is still a “full member” of the Mercosur, the statement marks a clear break in the practices and traditions followed by the Customs Union over the past 20 years. If any country wants to enter into a transaction with a third party, it needs the approval of other members. . Party.
This 30-year-old EU member also includes Argentina, Brazil and Paraguay. Since signing the world’s most The largest trade agreement Joined the European Union in 2019.
The center-right Uruguayan government has promoted the trading group’s rules to be more flexible, aimed at modernizing the group, and has received broad support from Brazil and Paraguay.
But as Argentina handed over its six-month interim EU presidency to Brazil on Thursday, they could also exacerbate tensions.
After a rare and brief overlap between the pro-market political leaders of Brazil and Argentina, the two major protectionist countries of the Mercosur, the relationship between alliance members has been since the return of the Argentine left-wing government led by Alberto Fernandez at the end of 2019 deterioration. Openly quarreled with far-right President Jal Bolsonaro in Brazil.
Bolsonaro, who once called Fernandez the “Red Bandit”, had previously Threat If Argentina causes trouble, it will leave the Mercosur. Last month, Fernández made controversial remarks suggesting that Brazilians are from the Amazon jungle and Argentina is mainly European immigrants arriving by boat, so diplomatic relations with Brazil have deteriorated.
Last year, the pro-market and reformist government led by Luis Lacalle Pou came to power in Uruguay, replacing the left-wing coalition that has ruled the country for the past 15 years, and relations between the group have further strained.
Lacalle Pou and Fernández quarreled with each other at the last presidential summit of the Mercosur in March, when the Uruguayan leader urged the organization to give its members more freedom to negotiate free trade agreements. “If we are a burden, then take another boat,” Fernandez responded at the time.
The situation has become more complicated due to political dynamics—important elections in Brazil and Argentina—and the economic impact of the Covid-19 pandemic in Latin America.