Mercosur discussions centre on expansion and economic issues

The Mercosur bloc has agreed to close its ports to ships from the British-controlled Falkland Islands which Argentina claims as its own territory. Uruguay will allow British-flagged civilian ships that may supply the island to use its ports, but not military vessels. This may be viewed primarily as a political issue, but for some it may be viewed as an economic one. Although Mercosur encourages free trade, Argentina and Brazil are turning more towards protectionism as the world economy struggles. Ships flying the Falkland Islands flag are mostly fishing vessels and take advantage of the rich fishing waters off the South American coast. Also, British companies are exploring for oil in the waters that surround the islands. According to Argentina’s President Cristina Fernandez de Kirchner, "Malvinas [the Falklands] is not an Argentine issue, it is a global issue because they are taking our energy and fishing resources out of the Malvinas and when they require more resources – and those of you who have resources think about this – they who have (armed) forces will go and seek out those resources wherever and however they see fit."Expansion of the trading bloc has also been a hotly discussed item. Although Venezuelan membership has been approved by Argentina, Brazil and Uruguay, it has been stalled for six years because Paraguay’s legislature opposes the measure. Ecuador has also filed an official request to join the Mercosur and has called for closer links between the Mercosur trading bloc and the Andean Nations Community (CAN) trading bloc whose members include Bolivia, Colombia, Ecuador and Peru. By including Ecuador in its membership, Mercosur will gain a foothold on the South American Pacific coast.The third major topic of discussion has been the economy. The trading bloc is yet again split as Argentina and Brazil are calling for protectionist measures to limit cheaper imports. However, Presidents of the Mercosur trade bloc finally agreed to individually raise tariffs on imports to shield their industries from a flood of cheaper imported goods stemming from the global economic crisis. For example, Brazil wants to increase the number of products subject to a common 35% import tariff to include chemicals and textiles. Uruguay and Paraguay, which are less industrialized and both depend more on imports, oppose these protections. Another area of growing concern for the Mercosur bloc is of a continued economic slowdown in the US and Europe which may result in declines in South American exports.Uniting under a strong trading bloc may benefit South America, providing it with the economic clout it needs in order to compete on the international playing field. But to unite under such an association requires all member countries to adhere to the agreed upon rules and regulations. Turning further towards protectionism will harm South America as it attempts to move beyond its emerging market status and thus could potentially drive international companies as well as logistics and transportation providers from the region. Foreign investment will cease as well and the region’s infrastructure problems will persist resulting in an undoing of the economic success South America has achieved over the past few years.

Quelle: eyefortransport
Portal: www.logistik-express.com