15 Years of Mercosur: Brazil and Argentina Still Don’t Get Along

The vice-president of the Brazilian Foreign Trade Association, José Augusto Castro, gave his evaluation this Tuesday, April 4, of the Mercosur, the bloc formed by Argentina, Paraguay, Uruguay, and Brazil.

In Castro’s opinion, the group is still far from the envisioned trade integration, as well as experiencing an "existential crisis typical for its age."

"We might say that, after 15 years, the Mercosur is behaving like an adolescent. It doesn’t know whether it’s a customs union, which was the original objective, or simply a free trade area. The former would mean the four countries’ having the same kind of duties in international trade operations. In the latter they would have individual duty schedules," he explains.

"The goal was for us to be a customs union, but we act more like a free trade area, since each country, particularly Argentina, adopts specific duties that blow holes in the agreement we have at present," he observes.

Despite the crisis, Castro goes on to say, trade among the Mercosur countries experienced significant growth. He points out that this growth was compromised by political interests.

"In the beginning there was strong commercial growth. But, as time passed, the Mercosur began to be used politically. Brazil itself used the Mercosur as a way to gain political strength vis-à-vis the United States in the negotiations over the FTAA (Free Trade Area of the Americas). There was a deviation from the original goals of the Mercosur, but, in commercial terms, it was very good," he judges.

In Castro’s view, the relationship between Brazil and Argentina is the most important and delicate aspect of the bloc. "Brazil and Argentina refuse to be complementary to each other. Both want to be the exporter of finished goods. That causes difficulties between the two," he explains.

Castro has reservations about Venezuela’s entry into the bloc. "Venezuela’s entry will add little. Despite having a lot of petroleum, Venezuela’s political situation is complicated, making it more difficult to reach agreements," he remarked.

Brazil and Honduras

Brazilian President Luiz Inácio Lula da Silva, during a meeting with Honduran President José Manuel Zelaya Rosales, Monday, April 3, expressed Brazilian interest in intensifying trade relations with Honduras, as well as diversifying relations with Central America and the Caribbean.

Lula specially cited Brazilian willingness to continue cooperation and knowledge transfer in the area of biofuel, particularly ethanol.

Zelaya agreed with Lula and talked about a possible cooperation also in AIDS prevention and control initiatives. Honduras President also suggested intensification of oil exploration projects, through the Brazilian oil company, Petrobras, as well as projects in the areas of defense and sports.

Lula suggested that all subjects discussed during the meeting become part of a future agenda between the two countries.

Agência Brasil

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  • Guest

    but they all go….
    …very well along…at the WTO !
    Guess why !

    Double game, tricky, stinky, greasy.

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