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LATIN AMERICA | 02-05-2020 10:09

Government says it’s not abandoning Mercosur, despite position on talks

Foreign Minister Felipe Solá says Argentina is not “giving up its seat at the table.”

Argentina’s decision to pull out of all future Mercosur trade negotiations will exacerbate the country’s economic crisis, opposition lawmakers warned this week as questions arose over the bloc’s future.

Citing economic policy priorities and the effects of the Covid-19 crisis, President Alberto Fernández’s administration withdrew from ongoing and future talks with several countries as part of the regional Mercosur trade bloc, the group’s pro-tempore president, Paraguay, said late last Friday night. 

One Paraguayan official, Deputy Minister of International Economic Relations Didier Olmedo, described the move as “unprecedented.”

The Foreign Ministry said in a statement last Saturday that while it supports regional integration, global uncertainty and its own economic situation led it to pull out of the negotiations.

Argentina’s ambassador to the United States, Jorge Argüello, said in a tweet that the decision was aimed at protecting Argentine companies and jobs.

The move affects talks with South Korea, Singapore, Lebanon, Canada and India, among others, he added.

The move doesn’t affect Argentina’s participation in completed trade deals, including its agreement with the European Union.

The opposition Juntos por el Cambio coalition, the grouping of former president Mauricio Macri, said the move would close new markets at a time when the country most needs them.

“Our challenges cannot be overcome by closing our economy with nationalist models such as those that were put in place during the 1929 debacle that devastated much of the world economy and led to the tragedy of World War II,” the coalition said in a statement on Saturday. “To get out of this crisis, Argentina needs more markets, not fewer.”

Uruguay's Foreign Minister Ernesto Talvi, meanwhile, said the decision would not "slow down progress of ongoing negotiations or others that may be launched in the coming months."

"We wish them a prompt return to the table. Together we are more," he said in a post on Twitter.

 

EU content for now

The EU has expressed its satisfaction that Argentina would remain at the table for talks with their bloc. 

"The EU welcomes Argentina's continued commitment to the EU-Mercosur Association Agreement and maintains its firm commitment that the agreement enter into force as soon as possible," read a statement from a spokeswoman for European Union's High Representative Josep Borrell issued Tuesday.

The spokesperson said that the agreement between Mercosur and the EU "will play an important role in promoting the cooperation relationship" necessary to "face the immediate crisis" and help in the "economic recovery on both sides. of the Atlantic." 

Government officials briefed journalists over the weekend that the decision was based on realism rather than ideology, given the problems facing Argentina and its economy. 

In an interview granted to El Destape Radio on Monday, President Alberto Fernández argued in fact that he wanted "a bigger Mercosur," before training his ire on his predecessor, Mauricio Macri, and Brazil's controversial leader Jair Bolsonaro.

"I am concerned that the Macri government allowed Mercosur to be distorted," he said, referring to attempts to allow each member of the bloc to negotiate individual trade deals. "If everyone can negotiate what they want for what Mercosur exists for?"

Addressing the Senate’s Foreign Relations Commission this week, Foreign Minister Felipe Solá said Argentina was "not leaving the Mercosur” and “giving up its seat at the table,” saying officials would soon meet with their regional counterparts to discuss the “acceleration” of commercial agreements.

He said that the government had sensed “an acceleration of Brazil's concerns and Uruguay's support, above all, in speeding up the conclusion of agreements already closed but still not concluded" and that this generated objections due to the coronavirus crisis. ““Times have changed, economies have changed,” he added, saying the government did not have time to “accelerate” talks.

With much of the country under lockdown to curb the spread of the novel coronavirus, Argentina’s economy is forecast to contract by 5.7 percent this year, according to the International Monetary Fund. The government is negotiating with creditors in an attempt to restructure US$65 billion in sovereign debt.

– TIMES WITH AGENCIES

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