Brazil to Have Tough Time Replacing Argentina in Mercosur Chair

This week in Cordoba, Argentina will be handing the Mercosur chair for the next six months to Brazil. During Argentina’s tenure negotiations to coordinate the incorporation of Venezuela to the group were approved in record time.

Other achievements during the first half of this year include overcoming the obstacles which since 1995 has impeded to advance with the Common Customs Code that for 2008 is expected to have imposed a common tariffs policy for the five full members.

The Cordoba agenda includes signing an economic complementation agreement with Cuba and a "framework" accord to negotiate a free trade agreement with Pakistan. A similar accord could be signed with Israel if documents are finished on time.

The Common Customs Code was launched in 1995 when the customs union Project for a common external tariff which had been agreed in the Buenos Aires summit of 1994 and approved at the end of that year in Ouro Preto, Brazil.

In 1997, in Argentina, Chile became Mercosur’s fist associate member, which was followed the next year by Bolivia during the Fortaleza, Brazil summit.

During the 1998 presidential summit in Ushuaia, Argentina, the Mercosur region was declared a "territory of peace and free of massive destruction weapons". Even more important at that meeting the "democratic" condition clause to become a Mercosur full or associate member was established.

The two 2001 summits on Mercosur tenth anniversary were dark moments with mounting commercial disputes between Argentina and Brazil, followed by the melting of the Argentine economy and default which sent shock waves throughout the region.

Intra Mercosur trade jumped from US$ 4.1 billion in 1991 to US$ 21.1 billion in 2005, after having dropped to US$ 10 billion in 2002. In the Montevideo summit of 2003, a free trade agreement was signed with the Andean Community following seven long, exhausting years of negotiations. CAN members are Peru, Bolivia, Ecuador, Colombia and Venezuela.

Mercosur-CAN with a population of 377 million and a GDP of US$ 1.5 trillion is equivalent to 12% of the US GDP. which has 80 million people less.

Mercosur’s latest incorporation Venezuela actually abandoned CAN last June. President Hugo Chavez argued that the group was "dead" following the signing of free trade agreements between United States with Colombia and with Peru.

Venezuela’s decision accelerated its incorporation to Mercosur which has been added to the group’s agenda in the Montevideo summit of December 2005.

Mercopress – www.mercopress.com

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