Uruguay claims MERCOSUR is stalled and needs to expand its trade
In Uruguay’s daily radio broadcast, President Jose Mujica criticized Latin America’s largest trade bloc, MERCOSUR, for being inefficient and stalled in trade with its current partners. The President claims the bloc needs to be more integrated into the world’s vast trading space, as it is currently excluded from business with important trade actors such the EU and US. He pointed to MERCOSUR’s serious size difficulties in comparison to these trade actors, who recently announced the intention of establishing a major North Atlantic free trade zone.
Mujica expressed his interest in expanding its trade with other actors, such as the free trade Pacific Alliance (comprised of Chile, Peru, Colombia and Mexico) which is open to foreign investment and the private sector. Similarly, he stated that “interesting offers” were proposed to Uruguay by Korea. However, Uruguay can be no more than an observer under current MERCOSUR conditions. Despite interest in diversifying trading partners, the current MECOSUR structure only allows for trade agreements with other parties if all member states are involved, a fact which has deprived MERCOSUR members such as Uruguay from potential positive economic gains and has prevented them from fully integrating into the world economy on a global level.
Mujica emphasized the importance of including those who are left out in the current free trade system, implying that unless MEROSUR expands and reforms its current trading structure, it is likely that the bloc continues to stagger behind and limit trading opportunities.
Promoting South-South Cooperation at the Third Africa-South America Summit
Increasing cooperation between Africa and South America was theme of discussion at the third Africa-South America Summit (ASA), which took place from February 20th to 23rd in Malabo, Equatorial Guinea. Twenty heads-of-state from Africa and five from South America gathered together with senior officials to discuss ways to use their resources and stimulate economic growth for the benefit of both regions. The talks saw positive support from both regions.
President of Equatorial Guinea Obiang Nguema Mbasogo proposed expanding the ASA group by including countries from Central America and the Caribbean. In his opinion, expanding the ASA group would promote solidarity and better strengthen relations between the two large regions. He stressed that the ASA group was designed to enhance South-South ties, but that this could not be achieved without the participation of all Latin American countries. He claimed that priority for development cooperation between the two regions should be in the strengthening of commercial ties through direct investment, and the creation of social funds for areas such as tourism, education, science and technology.
Nicaragua uses ALBA’s SUCRE
On February 28th, the tenth Political Council of the Bolivarian Alliance for the Peoples of our America (ALBA) took place in Caracas, Venezuela, with the presence of foreign ministries and representatives of the member countries of the bloc. The purpose of the Political Council of ALBA is to advise the Presidential Council in strategic political issues and proposals on international policy issues.
Amongst the various issues discussed, the aftermath of the meeting saw Nicaragua’s incorporation into the use of the “SUCRE”, a virtual currency that has been adopted as a legal tender for trade between the ALBA’s member states as an alternative to the US dollar. The Sandinista government sold 500 metric tons of black beans to Venezuela for 517,875 SUCRES, which is the equivalent of 65 million cordobas (or 2.6 million dollars) in real Nicaragua currency.
The SUCRE was implemented in 2010 and has been used for more than 2,600 transactions between Venezuela, Ecuador, Bolivia and Cuba prior to Nicaragua’s incorporation.