MercoPress. South Atlantic News Agency

Mercosur waking up to the significance and impact of the Pacific Alliance

Uruguay's Vice-president Astori has been most vocal: ”Mercosur mustn’t be a terminal station”; we need trade deals with the Pacific Alliance

Mercosur leaders called for dialogue with the Pacific Alliance over its perception that Mercosur is becoming an obstacle to integration and wider growth in the region. Uruguayan Vice-President Danilo Astori seemingly sparked the debate a few weeks ago when he said that “Mercosur mustn’t be a terminal station,” calling for formal trade deals with the Pacific Alliance.

 Founded in 2011 and having staged its ninth summit on June 20, the Pacific trade bloc is comprised of Chile, Colombia, Mexico and Peru.

Concern over the new bloc’s indirectly divisive effects arose from the attendance of Paraguayan Foreign Minister Eladio Loizaga at the summit, staged in Punta Mita, Mexico.

Loizaga said the Pacific Alliance was “one of the most open (blocs) in the region that desires full integration, as well as the free circulation of goods, services, capital and people.”

Paraguay was expelled from Mercosur over the impeachment of Fernando Lugo, but was eventually allowed to rejoin in December last year upon the election of Horacio Cartes.

Argentina's UIA industrial chamber head Hector Mendez, said the progress by the Pacific Alliance has Mercosur business leaders worried.

“We have to make a great effort ... to decide where we want to go and choose a path ... Today Mercosur is experiencing a very complicated situation, and whoever speaks to the contrary is lying,” he said.

For Mendez, the Alliance is “competition for Mercosur because it has much more business in the Middle East, China and South East Asia,” while Mercosur “cannot finish negotiations with the EU” over a free trade agreement.

Brazil, Paraguay and Uruguay are trying to reach an agreement with the European Union on trade and cooperation but have had to deal with the Argentine government reluctance to lower its tariffs sufficiently for the deal to be attractive for both sides.

Besides Uruguay and Paraguay, as countries with small economies, are trying by all means to establish trade links with third parties something which has been systematically stalled since Mercosur decisions must be by consensus and Brazil is most jealous of its domestic market.