Free Trade Agreement Approaches Israel to Brazil and Mercosur

Elyiahu Yishai Israel and Mercosur, which comprises Brazil, Argentina, Uruguay and Paraguay plus Venezuela, will sign a free trade agreement, parallel to the group's two day presidential summit scheduled for next week in Montevideo, Uruguay, when Argentina will be taking for six months the group's chair.

Uruguay's Foreign Affairs, Minister Reinaldo Gargano, said the signing ceremony will take place on Monday on arrival of Israel's Deputy Prime Minister and Minister of Industry, Trade and Labor, Elyiahu Yishai.

The agreement contemplates the immediate cut of tariffs for certain items, but as in similar cases, many other goods will undergo a far slower process because both sides "have industries they wish to protect," according to diplomatic sources in Montevideo.

Negotiations for the Mercosur free trade treaty with Israel started over two years ago in Montevideo during a regional leaders meeting similar to that of next week.

Mercosur founding and full members are Argentina, Brazil, Paraguay, Uruguay plus Venezuela that is in the slow process of incorporation. Started in 1991 Mercosur works more as a customs union and has common external tariffs on imported produce. Chile, Bolivia, Peru, Ecuador are associate members.

As to the agenda of the coming summit Mr Gargano said that above all what is significant is the presence of Argentine leader Cristina Fernandez de Kirchner in her first overseas visit as president.

"I imagine the Botnia pulp mill differences will be on the table but it will be more an issue for the Foreign Affairs ministers on Monday," said Gargano refereeing to the ongoing dispute between Argentina and Uruguay.

Gargano described relations between the neighboring countries as "correct" and with no "deceitful attitudes".

However contrary to tradition the coming summit will end when all business has been addressed. No official dinner hosted by Uruguayan president Tabare Vazquez has been programmed.

"I don't think a Mercosur summit can be assessed whether there was or not a formal dinner with all the presidents and ministers, and if so it's shortsighted," said Gargano.

The Uruguayan official pointed out that what really matters is that the pro tempore chair is effectively productive, and on this occasion "we expect to sign the trade agreement with Israel, to keep advancing in the Customs Code and working on the asymmetries which are so unfair for the junior partners".

Gargano said that for Uruguay the Customs Code must include three main points: elimination of non tariff restrictions; discussion of incentive and subsidies policies and greater flexibility to negotiate agreements with third parties, "on all of which we still have to reach a consensus, so I can forecast the code won't be ready next year as was programmed".

"Unfortunately Uruguay's petitions and proposals don't have strong backing inside the block, but we must keep pushing because Mercosur international political weight is significant".

Mercopress

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