The Mercosur summit to be held this Tuesday in the tourist Argentine city of Puerto Iguazú will be the first since 2019 to bring together in person the presidents of the four full member countries of the South American bloc. The presidents will attend the meeting Alberto Fernandez; from Brazil, Luiz Inacio Lula da Silva; From Uruguay, Luis Lacalle Pou; and from Paraguay, Mario Abdo Benitez.

“Mercosur meets again in person, which is something very powerful because during the pandemic the meetings were held online, which was less empathetic and less forceful conclusions were reached”stressed Foreign Minister Santiago Cafiero, when inaugurating this Monday the meeting of foreign ministers of the bloc created in 1991. And he announced that this Tuesday, “We will be able to count on the presence of the four presidents of the Member States for the first time in the last four years. This is the product of the work and commitment of each of the countries and the teams that are represented here”he stressed.

The summit this Tuesday in Puerto Iguazú will also be attended by the president of Bolivia, Luis Arce, as representative of that associated State; in addition to the elected president of Paraguay, santiago penawho will assume the head of the Executive of his country on August 15.

The sessions take place in a luxurious hotel within the Iguazú National Park, which protects the imposing Iguazú Falls, on the border between Argentina and Brazil.

A new regime of origin of the block

Mercosur is “very close” of having a new Mercosur Regime of Origin (ROM), the set of requirements and procedures to determine if a product can be considered as originating from the block and, therefore, enjoy preferential treatment, which includes the elimination of tariffs that tax intraregional trade. And it will continue in the second semester to conclude with the works oriented to that end, according to what Cafiero stated.

With this process, the bloc seeks to update the ROM to modernize this fundamental instrument for the integration of value chains between the bloc’s partner countries, simplifying the rules.

At the same time, Mercosur continues with the work to review its common external tariff (CET). After several years of negotiation to review and update the CET, in July 2022 the bloc approved a reduction in the CET for 66% of the tariff universe of the common Mercosur nomenclature (NCM), while enabling States parties to reduce the import tariff applied to an additional set of goods.

“The work oriented towards the drafting of a new origin regime for our bloc continued, which, added to the changes that we already made last year to the AEC, will constitute fundamental advances so that our bloc can face and benefit from the reconfiguration of the Value chains”highlighted Cafiero.

The debate over the agreement with the EU in 2019

Argentina, which holds the pro-tempore presidency of Mercosur, believes that it is necessary “update” the trade agreement with the European Union (EU) signed in 2019 to “narrow the gaps” according to Foreign Minister Cafiero. In his speech this Monday at the bloc’s foreign ministers’ meeting, the minister rejected the environmental annex that included the EU, for having a “partial vision” with a “little consideration of economic and social development” from the South American group.

“There is no ideological discourse, it has nothing to do with emotional issues, it has to do with objective issues”, indicated Cafiero when taking stock of the rotating Argentine presidency. He remarked that Argentina shares the objective of “advance” with the EU to definitively close a crucial pact “in a context of conflict and uncertainty”global “growing”but pointed to the community bloc for “stall” the negotiation process during “four years” by “internal political differences”.

“The agreement can be an effective vehicle to reposition Mercosur on the global map,” but for it “It is necessary to work and update the 2019 texts”he pointed out, in a position aligned with Lula da Silva.

mercosur. Foreign Minister Santiago Cafiero participates in a regular meeting of the Common Market Council (CMC) in Puerto Iguazú. EFE/ Juan Ignacio Roncoroni

Within this framework, Cafiero indicated as obstacles the enormous “asymmetries” between the two blocks and which, according to him, are not reflected in the general agreement signed in 2019, after two decades of negotiations. “Twenty-five of the 27 EU countries have a higher human development index than any country in our bloc”he declared.

Likewise, he criticized the differences regarding the release of tariffs for agricultural exports from one side or the other and the quotas for other products of interest, which have remained “outdated” in the current context. “We trade above what was agreed in 2019” so, with those criteria, now “we would have to reduce our exports”he explained to later cite the EU subsidies to agribusiness as another differential factor.

Likewise, it rejected the environmental protocol that the EU attached last February and which, according to the Argentine side, poses “new obligations” in terms of climate crisis and deforestation that “go beyond what was agreed in international forums”. “And forget references to the implementation methods, how we are going to implement it, something essential”he added.

Years of disagreements

At the Mercosur meeting at the end of 2019, held in Vale de Vinhedos (Brazil), the then President of Uruguay, was absent due to health problems. tabare vazquez (2005-2010 and 2015-2020), who died in December 2020, nine months after leaving office. In 2020 and 2021, the summits were held electronically due to the covid-19 pandemic, yes, with the participation of the leaders of the four countries.

But with the return to face-to-face meetings, both at the Asunción (July 2022) and Montevideo (December 2022) summits, the then President of Brazil, Jair Bolsonaro (2019-2023), was absent.

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