Brazil’s plans to strengthen and expand the Mercosur trading bloc are running into growing divisions among its members and a spiraling economic crisis in Argentina.
President Luiz Inacio Lula da Silva assumed the rotating presidency of the South American customs union Tuesday, promising to reduce dissent in the group founded by Brazil, Argentina, Uruguay and Paraguay. He said he would work to include Bolivia in the bloc and for the conclusion of a long-awaited free trade deal with the European Union.
“We’re going to have to make a huge effort to try to reduce complaints among us,” Lula said during a Mercosur summit in the Argentine city of Puerto Iguazu. “If it lasts a long time, a complaint becomes bitter, unpleasant. I will try to resolve the main disagreements in Mercosur, as together we are stronger and we have more negotiating power.”
Earlier, Uruguay President Luis Lacalle Pou complained about Mercosur’s inability to strike trade deals with other markets, especially the European Union, while it blocks his country’s plan to sign a bilateral agreement with China.
“Uruguay has struggled to get market access as our economy’s share of Mercosur trade has decreased,” he said. “We must keep negotiating as a bloc and, if not as a bloc, unilaterally.”
Accessing the Argentine consumer market is among the main complaints voiced by Uruguay, as the second-largest economy in South America raises obstacles to imports in a bid to protect its dwindling international reserves.
Uruguay’s main source of revenue comes from exports of soy, beef, dairy and other farm products. While Argentina is no longer its main trading partner, Uruguay’s tourism sector depends on thousands of Argentine visitors who flock to its beaches each year.
Uruguay did not sign onto the statement released by the bloc of countries at the end of the summit, the fourth time it has left its name off the declaration.
Lula also promised to conclude the agreement between the European Union and Mercosur, which was reached in 2019 but has not been finalized, by the end of the year. Environmental demands imposed by the EU are unacceptable and Brazil will present a counteroffer in the next few days, he said.
