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LatinNews Daily - 17 August 2016

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Mercosur crisis produces diplomatic tensions between Brazil and Uruguay

Development: On 16 August the Brazilian government summoned Uruguay’s ambassador to Brazil to appear before the foreign ministry (Itamaraty) to explain recent comments made by his country’s foreign minister, Rodolfo Nin Novoa, about the institutional crisis currently gripping the Southern Common Market (Mercosur) regional trade bloc.  

Significance: The summons for Ambassador Carlos Daniel Amorín Tenconi came after the Uruguayan press revealed that during a closed-door congressional session Nin Novoa complained that Brazil had tried to “buy Uruguay’s vote” against Venezuela being allowed to assume the pro-tempore Mercosur presidency from Uruguay. The transfer of Mercosur’s pro-tempore presidency to Venezuela, which according to Mercosur’s internal rules was next in line to assume the six-month presidency in July, is rejected by Brazil, Argentina, and Paraguay, all of which argue that the crisis-hit Andean country is not fit to preside over the bloc. But Uruguay, which formally relinquished the presidency last month, insists that Venezuela must assume the presidency as per the rules. The lack of consensus over the issue turned into a fully-fledged crisis when Venezuela unilaterally announced that it had taken over the Mercosur presidency, only for Brazil, Argentina, and Paraguay not to recognise this. The latest incident suggests that this impasse is far from resolved and could lead to growing frictions within the bloc.

  • The summons came a day after the Uruguayan press reported that it had obtained access to the transcript of the 10 August closed-door session of the national chamber of deputies’ foreign affairs commission in which Nin Novoa discussed the Mercosur crisis with legislators. According to the reports, at one point Nin Novoa told legislators that the government led by President Tabaré Vázquez was unhappy with Brazil’s attempt to pressure Uruguay into not transferring the Mercosur presidency to Venezuela amid the lack of consensus among Mercosur members over the issue. “We did not like it very much when [Brazil’s] foreign minister [José] Serra came to Uruguay to tell us…that they wanted the transfer to be suspended and that if it was not suspended they would not take us along in their negotiations with other countries, in a bid to buy Uruguay’s vote”, Nin Novoa is reported to have said.
  • The remarks attributed to Nin Novoa have been linked to Serra’s 5 July visit to Uruguay, when he held a private meeting with Nin Novoa and President Vázquez and afterwards announced that Brazil was proposing pushing back the transfer of the Mercosur presidency. At the time Serra also revealed that Brazil was preparing to embark on a new trade mission to explore potential trade deals with sub-Saharan African countries and Iran and that it wanted Uruguay to accompany it as “a partner”. But Uruguay rejected Brazil’s proposal and insisted that Venezuela had to assume the presidency as it was its turn to do so and there were no legal impediments to it. “The president was clear and emphatic: Uruguay is going to follow the rules and will transfer the presidency”, Nin Novoa is quoted as saying in the transcripts.
  • But Uruguay’s stance has been heavily criticised by Brazil, Argentina, and Paraguay. Arguing that the Venezuelan government led by President Nicolás Maduro, which continues to ignore the opposition-controlled national assembly, may be in breach of Mercosur’s democratic provisions, the three countries accused the Vázquez government of defending Venezuela for ideological and economic reasons. In recent years Uruguay has signed a number of lucrative bilateral trade deals with Venezuela and only recently it secured an overdue payment from Venezuela for a large contract for the provision of dairy products, which has provided a lifeline to Uruguay’s struggling dairy sector.
  • Following the publication of the remarks in the Uruguayan press, Serra yesterday said that he received the remarks attributed to Nin Novoa with “deep discontent and surprise”. Noting that the objective of his recent visit to Uruguay was to find a solution to Mercosur’s institutional crisis, Serra said that the remarks were “not compatible with the excellent relations between Brazil and Uruguay”.

Looking Ahead: The Itamaraty statement summoning Ambassador Amorín states that “Brazil is interested in a strengthened and active Mercosur, with a pro-tempore presidency that meets the minimum legal requirements...and is capable of leading the integration deepening and modernisation process”. This suggests that Brazil will continue to oppose Venezuela’s leadership of the bloc, and along with Argentina and Paraguay may still move to revoke Venezuela’s Mercosur membership for failing to meet all the conditions for full membership before the 12 August agreed deadline, as has been insinuated. But with Uruguay insisting that it considers Venezuela to be the “legitimate Mercosur pro-tempore president”, and Maduro vowing to fight all attempts to strip Venezuela of the presidency, the intra-bloc tensions look set to rise.