Brazil Says It Was Never Interested in Bolivia and Was Urged to Invest There

Brazilian Foreign Minister Celso Amorim emphasized Sunday that Venezuela’s membership and the current pulp mills dispute between Argentina and Uruguay pose no threat or risk to Mercosur.

"There are always risks, but I think that … Mercosur continues to be strong. Venezuela’s contribution is something positive and our countries’ interests go beyond the pulp mills construction dispute," said Amorim in an interview with Buenos Aires daily Clarin.

In integration processes "frictions are something natural, however it seems that everything happening in Mercosur is described as a tragedy or is over dramatized".

"We seem to forget that in the European Union, France voted against the Constitution and Britain never joined the common currency system, and nobody is forecasting the end of the world," said Amorim.

On the other hand there’s a clear vision of Mercosur as a South American backbone running from the Caribbean to Tierra del Fuego, "something which can’t be disregarded," underlined Mr. Amorim.

"Actually we have a very good relationship with Venezuela. We’re happy they’ve joined Mercosur. Venezuela has complied and taken every necessary step in terms of tariffs and in the negotiation of common foreign tariff regulations. The fact that they have decided to follow that road is a very good signal," he said.

Last Friday Mercosur’s full members, Argentina, Brazil, Paraguay and Uruguay, signed in Buenos Aires the so-called Accession Protocol which ratified Venezuela’s membership to the group.

Regarding the controversy between Argentina and Uruguay over the building of two pulp mills on the Uruguayan side of a shared border river, Mr. Amorim said the matter "is going well and improving".

"I don’t want to underestimate the problem, but I don’t see any risks for Mercosur" added Amorim in direct reference to the legal dispute both countries decided to take before the International Court at The Hague.

"We would have preferred that it was a no conflict situation, but things happen. We haven’t intervened in the conflict because we are hopeful things will find their own course and we can be more useful if the situation becomes stalled."

As to relations with Argentina, "they couldn’t be better".

However Amorim admitted some of the criticism from the junior members of Mercosur which have been tempted to look for other trade partners.

"There are reasons why small countries feel some frustrations …if we look at Uruguayan-Brazilian trade figures at the launching of Mercosur in the early nineties, in the range of a billion US dollars which has now dropped to 500 million US dollars."

To reverse the situation, he said "a new understanding is needed, so the small countries (Uruguay and Paraguay) can adopt mechanisms of industrial policy, financing and rules flexibility; basically a New Deal to continue on the right path".

Regarding Uruguay and Paraguay’s close links with the United States, Amorim said small countries have more to win inside Mercosur than isolated.

"Besides I don’t think the US is that interested in reaching bilateral free trade agreements with small countries; most probably there’s a political interest".

Brazil’s top diplomat added that "the cleverest in Washington are well aware that Mercosur is a stabilizing factor in the region. I don’t think Mercosur is losing space or position when member countries sign trade agreements with United States. We actually already have a large free trade area in South America, more significant and larger than most people imagine."

Regarding Brazil’s relations with Bolivia, "the issue is more complicated; it’s not only gas, it involves refineries, Petrobras, hydrocarbons exploration and exploitation".

"The fact is that the refineries are there because the Bolivians asked for them in the first place. Petrobras was not interested. Furthermore twelve years ago Brazil exported US$ 500 million and purchased US$ 30 million. Now Bolivia is selling US$ 1 billion to Brazil, so if they wish to nationalize resources as a sovereign nation they have a right, but Petrobras is also entitled to compensation for its assets and investments".

So will Petrobras associate with the Bolivian government energy company? "Petrobras is basically autonomous and it’s not a matter whether you’re the senior or junior partner, but rather if the enterprise is viable and reliable. Plus compensations, which is vital, so we have several months ahead of much patience and firmness," concluded Amorim.

Mercopress – www.mercopress.com

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