Mercosur Summit ‘Best In 15 Years’

By Jaylan Boyle, Senior Contributing Reporter

RIO DE JANEIRO – The 39th summit of South America’s co-operative trade bloc, Mercosur, ended last week in San Juan, Argentina, with many involved praising the conclusion to a constructive and amenable conference.

Brazilian President Luis Inácio da Silva went as far as to label the San Juan meeting ‘the best Mercosur summit’ in fifteen years. There was movement in several policy areas; perhaps most significantly on the long-standing issues between member nations Brazil, Argentina, Paraguay and Uruguay concerning distribution of customs revenue and the elimination of double-taxation of imported goods. The issue has taken more than six years to achieve a positive outcome.

The resulting Common Customs Code means that Mercosur has effectively become a kind of customs union, with the ability to deal collectively with third parties.

On a less positive note, no progress could be made in urging both Venezuela and Columbia to end their dispute which threatens to escalate beyond the failure of diplomacy. The issue was expected to be the ‘big ticket’ item at the summit, but hopes of a resolution brokered by Mercosur were dashed when Venezuelan president Hugo Chavez pulled out of the conference on Monday night, saying that his doctor had advised him not to go.

The success of the summit could indeed be due to the hobbling of the Venezuela-Columbia issue, with the conflict not allowed to dominate a conference that is primarily an economic forum.

Venezuela had been pushing for membership into the trade bloc, which is opposed by Columbia and the Brazilian president, who is due to become chairperson of the committee when Argentine president and host of this year’s summit Cristina Fernandez de Kirchner steps down, responded that Mercosur should not seek to resolve a bilateral issue at a multilateral trade summit. President Chávez responded by not attending the meetings.

Another item on the Mercosur agenda which got an airing at the summit was the plan to protect the world’s largest drinking water reservoir, South America’s Guarani aquifer. The huge aquifer covers an area that extends into all Mercosur countries, and all member nations agreed to begin practical steps in ensuring its protection on an ongoing basis.

A trade agreement was also signed between Mercosur and Egypt which is expected to open a market of around 76 million consumers to primary and industrialized products from member countries, including pharmaceutical, automotive and agricultural goods.

Bolivia, Chile, Colombia, Ecuador, Peru and Venezuela are all associate members of Mercosur and were represented at the summit. A number of international organizations also sent delegates, such as the Interamerican Development Bank and the Economic Commission for the Latin America and the Caribbean.

All members also resolved to initiate the distribution of funds to earthquake-ravaged Haiti.

Mercosur was formed in 1991 with the signing by member nations of the Treaty of Asuncion, which was later amended by the Treaty of Ouro Preto in 1994, at summit meeting in the Brazilian city of the same name. Its purpose is to promote free trade in the region, and the fluid movement of people and currency.