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Mercosur Members Gather in Brazil in Effort to Fix Fractured Group

Brazilian delegation at Mercosur meeting Mercosur presidential summit next week in Brazil has on the table an agenda of several highly sensitive issues that could deepen the rift between senior members Argentina and Brazil and junior members Paraguay and Uruguay, according to Uruguayan parliamentary sources.

The presidents from the four founding members of Mercosur are scheduled to meet in Salvador, capital of the northeastern Brazilian state of Bahia, together with other South American leaders but two issues, the Customs Code and the permanent chair of Unasur (Union of South American nations) will mark the tone of the meeting.

The prevailing feeling among Uruguayan ministers who last week were summoned to the Legislative Finance Committee was that the code will remain stalled and non-approved because of the different attitudes towards trade and open economies from country members.

While small members such as Uruguay and Paraguay favor lower tariffs and trade associations with other countries or blocks, Argentina prefers a "protectionist" emphasis, is not convinced of the elimination of the double tariff system – (Mercosur block plus each individual country) – and insists in including a clause enabling export taxes, such as those which generated the months-long dispute with Argentine farmers.

"Negotiations with Mercosur members on the Customs code remain at their level of difficulties, and most probably it will not be approved," Uruguayan Foreign Affairs minister Gonzalo Fernandez told members of Congress.

Another area of contention is what Uruguay defines as Argentina and Brazil's "bilateralism" with all its trade consequences among which a ban for junior members to reach agreements with third countries.

More over "Mercosur international negotiation capacity is dead," argues opposition Senator Sergio Abreu, because "Brazil and Argentina have different positions regarding international trade."

While Brazil has been building bridges and yielding in the framework of the World Trade Organization, "Argentina has sided with the radical positions that aborted a tentative agreement last July in Geneva," added Abreu.

Senator Abreu said that there's a growing feeling among Uruguayan politicians and businessmen that there are no solutions on sight and "it is becoming increasingly non viable to continue coexisting under these conditions with a Mercosur, which is virtually fractured."

Another thorny issue is the Unasur chair for which there's allegedly a majority support for former president Nestor Kirchner.

However Uruguay, given the ongoing disputes with the Kirchner administrations regarding the construction of pulp mills and the dredging of the River Plate access canals, has vetoed the proposed name.

Uruguay until last week had reiterated its strong position and since Unasur decisions must be taken on consensus it's hard to see any advance in this field. Since one black ball is enough to erase consensus, it's not clear if the rest of Unasur members actually support Kirchner for the top job.

Mercosur

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  • Falupa

    High tarrifs on other countries
    You are absolutely right Ch.c. The economy first of all is tearing mercosur apart. Not only this, but the Brazilian government is scamming everyone by not telling everyone the truth about their relationships with the rest of the world. This is why they are beginning to export more to Arab countries around the world.

  • ch.c.

    Furthermore…..
    No doubt that the city offering 61 new jobs…was NOT IN NEED OF THESE PEOPLE.
    The city administration is no dout already OVER STAFFED with already inneficient but relatively well paid bureaucrats !!!!
    No problem, just add more to the existing mountain of inefficiencies !
    It will help at the next city election !!!!
    Who cares about the costs ? Not them…for sure
    You the people are going to pay anyway ! With Lula GUARANTEES !

  • ch.c.

    This is why they are beginning to export more to Arab countries around the world.
    Dont worry, Brazil exports the world over VERY CHEAP GOODS WITH VERY LITTLE ADDED VALUE !
    66 % of Brazil exports are COMMODITIES !
    At today prices…..your grains farmers are more than struggling. In Mato Grosso they stopped paying their interests.
    Tractors and harvesters seizures are booming !

    Stupid question : why produce if there is no profit…even after the governement subsidies ???????

    Just look at Corn, priced at US$ 3,50 a bushel which is the equivalent of US$ 7.70 per sac of 60 kgs FOB PORT !
    Only the transportation costs from Mato Grosso to port is US 7.- per sac !
    Leaves Us$ 0,70 for the farmer….before subsididies….FOR THE FARMER AND BEFORE HIS PRODUCTIONS COSTS.
    But….but…but….the problem in Brazil is NOT in the price support from the government in corn. The subsidies is in the interests rate of the loan !!!!
    Therefore with Us$ 0,70 per 60 kgs sac, the farmer must still pay the seeds, fertilizers, pesticides, fongicides, fuel, spare parts, salaries and bank interests !!!!
    Just imagine the HUGE LOSS the farmer is incurring !

    Is it any better for soyabeans ? Because prices are at around Us$ 8,80 per bushel ?
    Lets see from my sources… the latest update was November 7

    – Gross Revenue p/hectare Brl 760.40
    – Average Price to Farmer (p/sac) Brl 15.06
    – Sale Price (68%) Parity 10 Oct 12.83
    – ROI (% variable cost) -18%

    Meaning on their assets (farm, land, tractors, harvesters) they earn ZERO…and on what they produce they lose 18 % on soyabeans
    and a lot more on corn !

    What about Parana the major grains state…in your view ? They should do better for 2 reasons
    1) much closer to port
    2) they need HALF the fertilizers per hectare than in Mato Grosso (yesss)
    Therefore their production costs is lower, and as the transportation costs to port is lower, they get higher farm prices.
    Still….on corn THEY LOSE A LOT OF MONEY and for soyabeans they are barely even…. AT BEST BEST BEST !

    And about what are talking CONSTANTLY your Government Chief Robin the Crook, Mantega the Idiot and Stephanes the Junkie ?
    Total production in tons, total production in US$, total exports in tons, total exports in US$ !!!!!

    SO WHAT…IF BRAZILIANS FARMERS ARE LOSING THEIR….. T-SHIRT, BRAZILIANS FLIP FLOPS, AMERICAN CAP, AND CHINESE UNDERWEARS ????????

    AND SO WHAT…IF YOUR FARMERS GET MORE BNDES LOANS ???????

    THEIR PROBLEMS ARE THE FARM PRICES, AND DUE TO THIS THEY CANT REPAY THEIR INTERESTS AND EVEN LESS THEIR LOANS AT MATURITY !!!!!!!

    And why are the farm prices SO LOW ? DUE TO LACK OF ROADS, LACK OF PAVED ROADS, LACK OF BARGE RIVERS TRANSPORTATION, LACK OF RAILROADS !!!!!AND…AND…AND…THE MANY GOVERNMENTAL ADMINSITRATIVE AGENCIES TOTALLY WORTHLESS AND INNEFICIENT THAT INCREASE THE COSTS FURTHER…BUT CREATE A LOT OF WELL PAID JOBS FOR LIFE WITH GOOD RETIREMENTS BENEFITS !!!!!!

    Brazil is by no way a good and efficient agricultural country. Brazil is very efficient…at creating inneficient bureaucrats !
    Brazil is one of the World Largest Administrative Country ! The Largest yesss…but also the WORST !
    Brazil Government and administratives layers just destruct the entrepreneurships of the REAL WORKERS, the real Wealth Makers, and replace them by MANY ADMINISTRATIVE AGENCIES…CROWDED WITH LAWS, REGULATIONS, FORMS, TAXES, RED TAPES HERE AND THERE, CORRUPTION, STRIKES FOR HIGHER WAGES.

    In Doing Business Ranking, for a mid size Brazilian company, they need 2600 hours per year, to fill forms and determine their tax liability ! The WORLD WORST !
    The Second World Worst is Cameroon…with 1400 hours !

    It just shows how much worse you are from the second worst !!!!!!

    Viva Lula, Viva Lulaa, Viva Lulaa !!!!!!

    Ohhhhh last but not least :
    As per Lula the Crook and his gang, things are doing well in Brazil ! Right ? Unemployment is relatively low.Right ?
    How could it then be possible that when a city offers 61 jobs…there are 5000 people queuing in the streets and waiting to pass the entrance tests ??????????
    Nooooo….my pure imagination ? May be not ! See by yourselves :

    http://expatbrazil.wordpress.com/2008/10/17/lib-why-return-home-after-six-months/

    Never forget…cheaters always cheat, liars always lie, hiders always hide. Brazil truly excel at this !

    LAUGH….LAUGH…LAUGH…LAUGH…LAUGH….LAUGH !

  • ch.c.

    While small members such as Uruguay and Paraguay favor lower tariffs and trade associations with other countries or blocks, Argentina prefers a “protectionist” emphasis
    Funny in the above headline statement there is no mention of Brazil….which with Argentina WANTS TO INCREASE IMPORTS TARIFFS ON MANY FOREIGN GOODS….TO PROTECT THEIR OWN INDUSTRIES !!!!!!!

    And then the Lula’s song is……DEVELOPED AND OTHER EMERGING NATIONS HAVE TO OPEN MORE THEIR COUNTRIES…while at the same time DOING THE OPPOSITE for the Brazilian IMPORTS !

    More tricky, more cheater, more liar, more scammer than BRAZIL….THERE IS NOT !

    Never ever trust what a brazilian say…..remains as true as in the past !
    Brazil always want to appear as the victim and innocent while they are the ones who are the offender.

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