Mercosur Summit: Leaders Seek Reform as Brazil Threatens Exit

The leaders of Mercosur, or the Southern Common Market, are meeting Tuesday in Montevideo, Uruguay in a presidential summit where potential “reforms” will take center stage.

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Argentine President Mauricio Macri, who is currently leading the bloc created in 1991 by Argentina, Brazil, Paraguay, and Uruguay, said the regional integration body “must leave behind any non-productive existential debate.”

The summit was held days after Brazil’s President-elect Jair Bolsonaro said he would abandon the bloc if there are no changes to benefit his country’s productive sector.

Uruguay’s Foreign Affairs Minister Rodolfo Nin Novoa said the country sees Brazil’s comments as an "opportunity" to improve Mercosur.

On Monday, after a meeting of Mercosur’s Common Markets Council, Nin said they are ready to "clean out" non-tariff barriers and that Mercosur is preparing to become an “area where goods, services, and people circulate freely.”

Nin also celebrated the bloc’s signing of a memorandum of understanding with the Eurasian Economic Commission, which represents 6.5 percent of the world’s trade and announced several internal agreements. According to him, national authorities had identified 78 barriers, of which 66 were analyzed and eliminated.

However, the bloc has a 20-year-old pending issue: the Free Trade Agreement with the European Union, which it has been unable to secure.

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Economists, environmentalists and different social groups in Europe and within the bloc’s countries have warned against the trade deal, arguing it would hamper industrialization in South America, increase the cost of medicine, and aid the expansion of monoculture and environmental degradation, among others.

Uruguayan President Tabare Vazquez said Tuesday that Mercosur should seek to improve inter-bloc trade. Among the reforms, countries are discussing the possibility to change a mechanism that prevents Mercosur countries from negotiating trade agreements individually.

Brazil’s President Michel Temer was optimistic on Tuesday about the future of an agreement between Mercosur and the EU, despite President-elect Jair Bolsonaro’s apprehension regarding a Mercosur-EU pact.

Right-wing Bolsonaro who will be sworn in on Jan. 1 says he wants to see more free trade within the bloc, rather than looking far afield for commercial agreements.

As new pro-tempore president, Macri issued a call to seek solutions for Venezuela’s “humanitarian crisis” and asked for the “restitution of democracy” in the country. Venezuela was expelled from Mercosur in 2017, after Brazil and Argentina had experienced political shifts away from left-wing governments after a parliamentary coup and elections, respectively.

"We open Mercosur and that has to be the key ... We have to have, in the face of globalization, an increasingly efficient opening," Temer commented on Tuesday in Montevideo.