LAST CHANCE FOR THE MERCOSUR?

The reasoning behind Uruguay’s breach of protocol

It all happened last week. On Monday, Walter Cancela, Uruguay’s Ambassador to the European Union (EU) belied reports suggesting his government was in favour of the Mercosur entering free trade agreements with the European bloc, without waiting for the conformity of all member countries. Brazil’s Dilma Rouseff seems to be choosing this road as well.

Although not specifically mentioned in public statements, the dissident member states are Argentina and Venezuela.

On Thursday, 4 June, Uruguay’s Foreign Minister Rodolfo Nin Novoa told the press that Cancela was wrong, that he had spoken out of turn and that foreign policy decisions are made by the president, Tabaré Vázquez. Consequently, Nin Novoa said, Cancela would be removed from the job. Later, the foreign minister then toned down Cancela’s “punishment,” explaining that rogue ambassador had been slapped on the wrist but not sacked.

Believe it or not, this succession of events was quite extraordinary. But surely they weren’t the end of the world. Having said that, it is not the done thing for a government to publicly sack or even tell off an ambassador posted abroad. Surely all governments reprimand or sack their diplomats, and possibly quite frequently. But they do it silently and not in the public eye. In other words: much more diplomatically. (Pun intended.)

The politics behind the affair are relatively easy to explain. Although President Vázquez belongs to the same party as his predecessor José “Pepe” Mujica, it is public knowledge that they belong to different factions within the Frente Amplio, and do not see eye-to-eye on many issues.

Moreover, Vazquez is known to be even less enamoured than his predecessor with the current Argentine government. And politicians from Uruguay — as well as those from Paraguay — have been lobbying against what they have seen as Argentina’s feet-dragging on an agreement with the EU. As in the case of Uruguay, there is no love lost for the Mercosur in Paraguay.

But — being the smaller members — both Uruguay and Paraguay were lonely voices in the Mercosur desert. Until quite recently, that is, when — perhaps pushed by her country’s current economic difficulties — Rousseff altered Brazil’s traditional position. She is now in favour of a “two-speed” agreement. In other words, member states should have the liberty of speeding up or delaying free trade negotiations with the EU, according to the Brazilian president.

Good news for Montevideo

The change in Brazil’s policy was good news in Uruguay. In addition to the president’s position, the opposition shares the negative perceptions of Mercosur. There are, obviously, some relevant exceptions. Walter Cancela is one of them. But he is a legacy of Mujica’s time. In fact, the latter was quick to join the political fray within the Broad Front, and, on June 4, he went public voicing his disagreement with Vázquez’s position. Which explains his follower, Cancela’s, rather undisciplined ways.

There is some speculation that the disagreement about the Mercosur’s direction, between incumbent president and predecessor has also occurred in Brazil, between Rousseff and former president Luiz Inácio Lula da Silva. Who — by the way — met President Cristina Fernández de Kirchner last Saturday to discuss unspecified “regional issues.”

If they chatted abut Mercosur, and were sincere with each other, they might have agreed that, unfortunately, the Mercosur bloc is at present far from a shining success story. The list of mutual complaints is quite long. The current disagreement between Argentina and Brazil about automobile trade is just one case in point. But, if the two big partners find it difficult to compromise with each other, there is obviously very little hope for the smaller and weaker partners. They simply lack the necessary leverage

Likewise, Mercosur does not seem to be very apt as a negotiating tool with third parties. The discussions about a trade agreement with the EU started exactly 20 years ago. And it seems quite clear that nothing, or almost nothing, has been achieved. True, the blame should be placed both sides of the Atlantic Ocean. But it is also true that other regions have managed to overcome difficulties and agreements with the EU are now in place.

The Washington effect

But what is even more worrying for the “two-speed” advocates is the fact that the EU seems likely to conclude a free trade agreement with the US quite soon. Does this matter? Yes. Other trade partners could suffer serious damages. And it seems that many decision makers in Brazil, Uruguay and Paraguay are beginning to feel that the Mercosur is more of a liability than an asset. And that it is not delivering.

Some even say that the dream of the 1980s needs a complete overhaul or that it should be replaced by something different and more up to date.

So much so, that they are prepared to risk serious damage to the bloc and its future, or the wrath of reluctant partners like Argentina and Venezuela, in order to move forward over an agreement with the EU, which potentially seems to be more beneficial.

Possibly, this explains the Uruguay breach of protocol this week with their ambassador in Brussels, in order to avoid sending the wrong signals to the possible EU partners.

@andresfederman

CREDITS: BUENOS AIRES HERALD