May 25, 2013
An expanded Mercosur
With a crippled Unasur
Just as Friday’s convention photo showed a lame Mercosur — with Cristina Fernández de Kirchner, Dilma Rousseff and José Mujica, but without the Presidents of Paraguay (suspended) and Venezuela (convalescent) — Brazilian and Argentine political lobbyists, along with some Bolivarian middlemen are frantically working for an expanded Mercosur photo, in which four new members would be joining the club. After Venezuela’s hurried entrance into the group last week, the door is now wide open for more partners.The clock must be ticking fast: the details of the new Mercosur — expanded and revisited — were discussed between the teams that accompanied the South American leaders in Mendoza.
What would the expansion of Mercosur involve? Besides current members Argentina, Brazil and Uruguay, as well as recently incoporated Venezuela and temporarily suspended Paraguay, the regional commercial bloc is negotiating the admission of Ecuador, Bolivia, Guyana and Surinam. This would produce a photo with a lot of similarities to Unasur’s, which has 12 members (although currently with one fewer, due to the temporary suspension of Paraguay).
However, Mercosur’s immediate expansion would be expressly designed to exclude Chile, Peru and Colombia: three countries which, at the beginning of June, signed an agreement with Mexico to establish the Pacific Alliance, whose trade objectives are focused on Asian markets.
Few are better placed to explain the motives behind Mercosur’s “selective” expansion than Brazilian Samuel Pinheiro Guimaraes, the high-level representative (or secretary-general) of the bloc until last Thursday, when he resigned citing “political reasons”, which in Brasilia was immediately translated as ‘lack of budget.‘ However, before resigning, Guimaraes was able to present his 15-page document on the “Mercosur plus 9” project to the presidents meeting in Mendoza.
According to Guimarares, the creation of a trade bloc for the entirety of South America is imperative. Would the Unasur framework of 12 countries be the best platform to launch the new Mercosur? Not quite: the Brazilian rejects the Unasur paradigm, because in this club of 12 countries there are three that “have adopted liberal strategies in order to insert themselves in the global economy, and that is a complication for the construction of regional promotion and development policies.” The three pariah countries are Chile, Peru and Colombia. (These “rejected”, along with the two “admittable” countries — Bolivia and Ecuador — make up the five associate members of the Mercosur).
Leaving aside the ideological syllogisms of Guimarares (he was the former deputy foreign minister and also strategic affairs minister under Lula, and belongs to the “os barbados” (“bearded”) left-wing faction in Itamaraty), there are other facts that explain why Mexico DF, Bogotá, Lima and Santiago are looking to the Pacific — and turning, according to some isolationist chauvinistic South American group, their back on the region.
Maybe the figures can speak for themselves: in 2011, the four members of the Pacific Alliance exported US$525 billion worth of products, the equivalent of 55 percent of Latin America’s exports. Furthermore, the three South American countries are internationally ranked as investment grade, and all have free trade agreements with the US, while Mexico is connected with Canada and the US through NAFTA.
It is, no doubt this trade relation with Washington that sticks in the throat for Guimaraes and the South American fanatics. “The US project for South America is not the Mercosur bloc but bilateral ‘mini-FTAs’, just like it has with the Pacific Alliance,” said the Brazilian two days ago in an interview with Folha de Sao Paulo.
A more flexible and perhaps naïve view, lacking any political blinkers is Uruguay’s President José Mujica. “I’m sure that three or four countries are going to ask to be included in Mercosur,” he said just after the close of the Mendoza meeting. Mujica stated that, with the incorporation of Venezuela, “Mercosur has left behind the fence which it had been living with for some time. This is good because it diversifies our markets.” He added that the bloc “is willing to negotiate with countries that have Free Trade Agreements,” stating that Colombia, with its FTA signed with the US, was a good example.
Dilma and CFK vs. Piñera
However, negotiations on the Paraguay issue during the summit were by no means relaxed. According to sources involved in the double Mercosur and Unasur summit in Mendoza which were consulted by the Herald, Presidents Cristina Fernández de Kirchner and Dilma Rousseff were the leading voices that called the shots during the discussions.
According to the same sources, once Paraguay had been suspended from Mercosur, both Dilma and CFK had intended to double the bet and ensure the country was expelled from Unasur. It was at this point that Sebastián Piñera voiced, apparently quite strongly, the only opinions against this expulsion. Piñera allegedly stopped his Brazilian and Argentine counterparts in full stride and stated that what they had decided for Mercosur could not be imposed for the entire Unasur, according to the sources. At the same time, Peruvian Ollanta Humala agreed by nodding his head, but did not attempt to verbally align himself with the Chilean. On the other hand, neither Venezuela’s Foreign Minister Nicolás Maduro, nor Ecuadorian President Rafael Correa or even Bolivia’s Evo Morales wanted to get involved in the argument.
The sources also stated that the internal Unasur argument dissipated following the approval of a “consensus” measure for the parties: the possibility that Paraguay’s suspension from Unasur could be revoked before the April elections. A High Level Group, whose constitution will certainly bring another internal row within Unasur, will be the one entitled to lift the ban on Paraguay.
Meanwhile, the Paraguayan Foreign Ministry yesterday threatened to break off and take the country out of Unasur: yet another crack in the realignment of South American positions, crumbling following the Lugo crisis in Asunción.