Brazil and Uruguay Presidents Meet. They Have Some Mending to Do

Uruguyan and Brazilian presidents Tabare and Lula "All Mercosur members should be satisfied with the benefits and advantages obtained inside the (trade) block, because only like this will they remain hooked to the integration process," said Brazilian president Luiz Inácio Lula da Silva who this Monday begins a (long expected) brief six hours visit to neighboring Uruguay.

Published Sunday in Uruguay's main daily, El Pais, the extracts of the written questionnaire below show a conciliatory but firm Lula who insists that Brazil "has given clear examples" of its intention to contribute to solving the asymmetries problems inside the block "by contemplating Mercosur junior members."

Uruguay – and Paraguay – repeatedly claim they have not reaped the benefits of Mercosur, have been left out of the decision making process, (monopolized by Brazil and Argentina), and have mounting difficulties with access to senior members markets clearly indicated in the huge trade deficits. (Uruguay has a one billion US dollars trade deficit with Mercosur senior members).

Given this ongoing scenario and the virtual lack of reaction from Argentina and Brazil, Mercosur junior members have been looking for other trade and political options, including flirting with the United States, which is strongly rejected by the Lula administration.

Uruguay in the meantime has signed a Trade and Investment Framework Agreement with the United States, the poor option for a free trade agreement but has made it plain clear that that is the final objective, and will be receiving President George Bush for a 36 hours visit in ten days time.

On this background Lula arrives in Uruguay (the "grumpy" member of Mercosur according to the Brazilian press) with several investment projects to help boost bilateral trade, to promote energy and other infrastructure advances and promises of tariff reforms to facilitate market access inside Mercosur.

The written interview also refers to leadership in the region and Venezuela's president Hugo Chavez, who the United States catalogues as a threat to democratic governance and stability in several countries.

Lula replies that regretfully, "it is routinely reported that there's a leadership competition between Brazil and Venezuela or Brazil and other countries." However all of Brazil's neighbors "are our partners" and Venezuela's incorporation to Mercosur "will certainly be a constructive contribution. President Chavez and I believe in regional integration".

Finally the Brazilian president says South America is going through a "historically important moment" with governments converging in such grave issues as combating hunger, poverty, promoting education and development with social justice.

This helps to make the integration process more dynamic, but they are necessarily "long term processes". And it's only natural that mishaps should happen, which are gradually overcome, "with patience and using the appropriate mechanisms."

Foreign Affairs, Mining and Energy, and Trade ministers, Celso Amorim, Silas Rondeau and Luiz Fernando Furlan together with the president's most influential advisor Marcos Aurélio Garcia, make up the Brazilian official delegation.

A delegation of Brazilian businessmen is expected in Montevideo next Friday as the follow up of President Lula's brief Monday incursion.

"We want to revert the disenchantment and to preserve the interest and necessary doses of satisfaction and balance, which Uruguay must perceive" in its relation with Brazil and Mercosur, said Enio Cordeiro, head of the Uruguay
Desk in the Brazilian Foreign Affairs ministry, quoted by the Brazilian press.

Last Friday a release from the Brazilian embassy in Montevideo said that "Brazil recognizes the difficulties of the junior economies in the framework of Mercosur, but it's determined to implement mechanisms that address the current asymmetries".

Uruguayan and Brazilian political analysts also agree that on a personal level Lula and President Tabare Vazquez have some mending to do. The Brazilian president twice suspended his visit to Uruguay and was absent from the Ibero-American summit last November in Montevideo.

Vazquez was present at the Mercosur presidential summit last January in Rio do Janeiro but left immediately following the plenary session.

Mercopress

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