Mercosur Foreign Affairs and Finance ministers met Thursday, June 28, in Paraguay, ahead of the presidential summit when the trade block's six months rotating presidency will pass from Paraguay to Uruguay. Debate at ministerial level focused on ways to reduce asymmetries between the economies of major partners Brazil and Argentina and junior members Paraguay and Uruguay.
The also talked about the recent deadlock at the Doha Round of talks at the World Trade Organization and about resumption of negotiations with the European Union.
Host Paraguayan Foreign Affairs minister Ruben Ramirez underlined four "issues" in Mercosur sixteen years of existence, which remain unachieved: free circulation of goods; elimination of internal taxing which obstructs international trade; lack of solidarity and overcoming asymmetries.
"Paraguay can't feel satisfaction in Mercosur 16 years," said Ramirez who claimed that in spite of the agreed elimination of internal tariffs in 1994, "non tariff measures continue to obstruct trade among the block's four full members, Argentina, Brazil, Paraguay and Uruguay".
Statistics show that in the framework of Mercosur, Paraguay and Uruguay have consistent trade deficits and Argentina and Brazil surpluses.
Ramirez said Paraguay is the "most impaired" when neighbor countries such as Argentina and Brazil impose non tariff measures because "we are landlocked and every day of delay in (Argentine) customs not only generates frustration, but also unrecoverable economic losses".
"If Mercosur has clear rules of the game for trade, essential for any integration process, and they are valid for all without discrimination, then Paraguay would have no claims, and simply abide by the rules. However Paraguay's non satisfaction comes from the variability of those rules and their "flexible" application", complained Ramirez.
The Paraguayan minister also pointed his guns to Brazil, claiming a three "steps" taxing on Paraguayan goods, at federal, state and municipal levels, which for all practical terms becomes a "formidable tariff structure".
Ramirez also called for greater macroeconomic coordination, "an issue I hope the summit will address" arguing that Brazilian or Argentine currency devaluations, (as happened in 1999 and 2001) have devastating effects for junior members, but "if we Paraguay devalue, non of our partners will feel the impact".
Presidents Nestor Kirchner, Luiz Inácio Lula da Silva and Tabare Vazquez, together with host Nicanor Duarte Frutos are set to meet Friday at a hotel in the suburbs of Asuncion.
Fifth member Venezuelan President Hugo Chavez will not attend the summit because he is on an international tour to Russia, Belarus and Iran.
Venezuela's full membership in the bloc is pending ratification by national parliaments. Chavez will be represented by Vice President Jorge Rodriguez.
Presidents Evo Morales of Bolivia, Michelle Bachelet of Chile and Rafael Correa of Ecuador should also participate.
Mercosur full members comprise 234.5 million people and a GDP equivalent to 75% of South America's, according to United Nations and Paraguay's Central Bank.
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