Mercosur reinforces customs union plan

FOZ DO IGUACU, Brazil, Dec. 17 (UPI) -- Leaders of Latin America's Mercosur trading bloc vowed to pursue the goal of establishing a common market and customs union encompassing the member countries despite continuing squabbles over sometimes trivial issues of integration.

Mercosur has been pursuing the idea of replicating EU-style institutions since it was founded in 1991. Its two-tier membership comprises Argentina, Brazil, Paraguay and Uruguay as founding members and Bolivia, Chile, Colombia, Ecuador and Peru as associates. Venezuela is awaiting ratification as a full member.


The leaders gathered at Foz do Iguacu waterfalls resort to push for more concrete measures to make the common market a reality.

Days earlier the summit was threatened with a Paraguayan boycott in retaliation for Argentine obstruction of the land-locked nation's river transport merchandise, which was stranded at Argentine ports following protest action by Argentina's powerful maritime workers union.

RELATED Mercosur discord eased by Paraguay deal on Venezuela

In the latest development, outgoing Brazilian President Luiz Inacio Lula da Silva faced the Paraguayan industry's condemnation for failing to deliver on a promise to share electricity generated at the joint Brazilian-Paraguayan Itaipu dam.

Mercosur is in negotiations with the European Union to win agreement on a wide-ranging deal that will put Latin American agricultural produce in direct competition with European farm output, a prospect seen with skepticism by many European farmers' representations.


The cash-strapped EU is pursuing a partnership deal with Mercosur on the promise of winning new markets for European exports, services and investment products.

RELATED Argentina-Paraguay shipping row gets worse

Mercosur also initiated steps to regulate immigration within the region. Currently, illegal outflows of labor from poor Latin American countries to relatively better performing economies are causing political and sociological problems for host countries.

In riots this month, Bolivian and Paraguayan migrant workers faced harsh treatment from Argentine police, leading to at least three deaths.

The founding four -- Argentina, Brazil, Paraguay and Uruguay -- agreed to draft common investment guarantees, anti-trust laws and a single policy on the automotive industry. Ministers from the participating countries also agreed to eliminate barriers to service industries and tariff exemptions on goods.

RELATED Mercosur-EU trade talks marred by fear of the unknown

Most Mercosur economies are growing at an annual rate of 7.5-9 percent. Internal trade is thriving and interim figures put the current value at $42 billion. But prospective full member Venezuela, a major consumer and importer, isn't doing so well despite its oil wealth. Venezuela's economy contracted this year, unlike most of Mercosur constituents, partly the result of a severe drought, water and electricity shortage last year that curtailed production.

Delegates attending the summit said the region's overall national income growth had helped Mercosur turn back from decline or, at worst, disintegration like other ambitious regional groupings formed earlier.


In a symbolic display of unity, the leaders decided to introduce a new Mercosur automobile license plate. A bus transporting the summit leaders was chosen as the first vehicle to bear the new license plate.

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