Paraguay, suspended from Mercosur, has requested observer status at the Pacific Alliance
Paraguay is doing what it thinks is best for Paraguay.
On January 29th, 2013 Paraguay has formally requested to become an observer of The Pacific Alliance (PA). The Pacific Alliance is a Latin American trading bloc launched on 6 June 2012. It groups Chile, Colombia, Mexico and Peru. The four nations of the Pacific Alliance represent about 36% of Latin America’s GDP. According to the World Trade Organization (WTO), the countries of the Pacific Alliance jointly exported about U.S.$ 445 billion in 2010, almost 60% more than Mercosur exported in the same year.
The Alliance aims to reach new trade deals with partners in Asia like the 10-nation ASEAN bloc, creating a cross-Pacific trade arrangement.
Foreign minister of Paraguay, Fernandez Estigarribia said that Paraguay has the right to promote its foreign trade and look for new markets. Industrial Union of Paraguay (UIP) president Eduardo Felippo asserted that Paraguayan businesspeople “no longer think in terms of Mercosur” and prefer the option of joining the Pacific Alliance, adding that “the idea of the business community is to no longer depend on Mercosur”. However, former Foreign minister Leila Rachid added that “Paraguay must look for new markets and trade agreements and the best reference in the Pacific alliance,” however since (landlocked) Paraguay has no outlet to the sea “it can’t and shouldn’t abandon hastily any of the blocks to which it belongs, particularly Mercosur”.
Paraguay is currently suspended from Mercosur and Unasur until the new presidential election in April 2013. Currently, Spain, Australia, New Zealand, Canada, Uruguay, Panama, Costa Rica and the latest Japan and Guatemala hold observer statuses within the Pacific Alliance.
The next Pacific Alliance meeting will be held on May 24th, 2013 in Cali, Colombia.
Argentina promotes a delay in Mercosur-EU discussions for a free trade agreement
The EU/Brazil summit took place on January 24, 2013 in Brasilia. One of the messages from Europe is a strong commitment that the Mercosur-EU agreement finally becomes a reality, said Ambassador Ana Paula Zacarias, the Head of the EU Delegation in Brazil, adding that the EU wants to support negotiations and “we believe that from the Brazilian side also”.
However, following the summit Argentine president Cristina Fernandez downplayed immediate discussions for the trade and cooperation agreement between EU and Mercosur, arguing that the South American block should elaborate and discuss new proposals to be presented to the EU, stating that “we need a Mercosur ad hoc intra committee to discuss and re-elaborate new proposals and a new offer to present in the last quarter of this year to the European Union” because in this new world “we have new protagonists and new trade terms”.
Cristina Fernandez commented that the private meeting with Brazilian president Dilma Rousseff “was excellent, but we are going to have further talks later,” adding that, “the negotiations with the European Union can’t be based on 2004 decisions, where new scheme of premises must be built first within Mercosur because we are not only Argentina and Brazil but also Paraguay, Uruguay and Venezuela and let’s not forget Paraguay is holding elections next April and in August will have new authorities”.
Cristina Fernandez’s statements contradict the consensus reached by Brazil and the EU during bilateral discussions held on Jan 24th in Brasilia to ‘speed’ EU/Mercosur talks so as to sign an agreement as soon as possible.