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Argentina Had Veto Power over Brazilian Deals with Uruguay

Casa Rosada in Buenos Aires, Argentina, the seat of government

Casa Rosada in Buenos Aires, Argentina, the seat of government The Brazilian initiatives proposed by President Luiz Inácio Lula da Silva during his Monday summit in Uruguay with his counterpart Tabare Vazquez were previously considered with Argentina, according to reports in the Buenos Aires press.

Although Argentine president Nestor Kirchner was not present at the Monday summit in Colonia, (only 30 miles away from Buenos Aires), Argentina interpreted the summit as "a positive signal for the consolidation of a solid and united Mercosur in spite of circumstantial bilateral differences which might exist between some of the block's members" is quoted Deputy Secretary for Latinamerican Integration, Eduardo Sigal in the Buenos Aires press.

Reliable sources from Casa Rosada, seat of the Argentine Executive, also admitted that the global proposals put forward by Lula to his Uruguayan counterpart Vazquez had been previously considered by Brazilian diplomats with the Kirchner administration, and "although the president (Kirchner) did not participate of the meeting he strongly supported the gestures and willingness of both leaders to reach an understanding".

A delegation of Brazilian negotiators headed by the Deputy Secretary for Latinamerica, Jorge Touney met last week in Buenos Aires with Agustin Colombo Sierra, cabinet chief of the Foreign Affairs ministry and "went over the agenda of issues to be addressed by President Lula with President Vazquez".

"All issues to be considered in the Colonia summit were analyzed and a final polish of proposals was agreed with the Brazilian delegation," said a spokesperson for the Argentine Ministry of Foreign Affair.

One of the issues which were axed in the Buenos Aires meeting was Lula's initiative to make origin rules more flexible, a measure designed to soften Mercosur asymmetries and facilitate junior members' exports to Brazil and Argentina, a reiterated demand from Uruguay and Paraguay to help boost their own industries. However the "good will" gesture from Lula could have opened the door to imports from third countries which would only be forced to pay the block's common external tariff.

"From Brazil's point of view the initiative would open its market to industrialized goods from junior members, but for Argentine industries it could be highly harmful, for example with a proliferation of auto parts for automobile manufacturers," said Argentine sources.

They also pointed out that even when Lula in Uruguay talked about the need for every Mercosur member to reach bilateral trade agreements with third parties, this did not represent a specific approval for Uruguay to go ahead with talks for a free trade agreement with United States.

"A free trade agreement with the US is political utopia since the US Congress has yet to ratify the agreements reached with Colombia and Peru. Uruguay wouldn't even have time to talk about it when President Bush visits the country," added the sources.

"Any trade agreements of this kind with the Bush administration are currently non viable," concluded Argentine sources from Casa Rosada.

Mercopress

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