“A coup against Mercosur” claims leading Brazilian newspaper

South America Political Farce

Brazil’s conservative but influential daily O Estado de Sao Paulo dedicated the main Tuesday editorial to the Mercosur suspension of Paraguay and the entrance of Venezuela arguing that what happened at the group’s summit in Mendoza was “a coup against” the block.

 Dilma Rousseff’s decision “disastrous and shameful”

The editorial under the heading of “Coup against Mercosur” describes Brazilian president Dilma Rousseff decision to suspend Paraguay and incorporate Venezuela as “disastrous and shameful” and said the whole manoeuvring was “scandalous”.

Rousseff followed the orientations of her peer from Argentina Cristina Fernandez whose “democratic credentials are more than doubtful” says the editorial and regrets that the destiny of the regional group has been submitted to the political objectives of the Venezuelan president Hugo Chavez, now that Paraguay’s parliament which was the only one blocking the incorporation, has been suspended from Mercosur.

“Besides representing a serious threat to Mercosur, already weakened by internal divisions because of protectionist practices and the lack of competitive integration capacity at global level, the decision favouring the access of Venezuela is very questionable legally” argues the newspaper since “Paraguay even suspended is still a member of Mercosur”.

And the big question is: following the 2013 presidential elections “the opposition from Paraguayan lawmakers to Venezuela’s incorporation will have lost effect?” asks O Estado de Sao Paulo.

Further more the newspaper affirms there is no possible way to doubt the legal basis of Fernando Lugo’s impeachment, but yes there are sound foundations to criticize the punishment inflicted on Paraguay. “Who in this story really merits to be called a coup sponsor?” asks the editorial. So far the diplomats and presidents involved in condemning Paraguay have been unable of sustaining their decision in a clear political foundation. There is a considerable difference in pointing out the expediency of the impeachment of President Fernando Lugo and proving the violation of a constitutional rule”.

The editorial asks a further question: following the suspension, “will the Paraguayans have an interest in remaining in Mercosur? The newspaper then refers to Argentine protectionism and the ban on Mercosur members of negotiating unitlaterally with third nations or blocks as one of the main obstacles for lucrative businesses with sides such as the US or the European Union.

“Maybe the Paraguayans will discover in their absurd isolation a further inspiration to free themselves from this failed customs union and search for relevant trade business for their country outside Mercosur”.

Mercosur Farce

Astori describes Mercosur latest decisions as “aggression and major institutional blows”

“It’s a major institutional blow, maybe the most serious in the 21 years of Mercosur” said Uruguayan Vice president Danilo Astori in direct reference to the group’s decision to incorporate Venezuela with the approval of Argentina, Brazil and Uruguay and the absence of Paraguay.

 ”The institutional framework of Mercosur is so weak it can become useless”, said the Uruguayan Vice President

What happened last Friday in Mendoza with the incorporation of Venezuela and the sanctioning of Paraguay “is an aggression that goes directly to the heart of the Treaty of Asuncion and ignores one of the most important basic rules which is that the incorporation to Mercosur of a full member must be approved by all existing full members”, said Astori, in open discrepancy with President Jose Mujica, Foreign minister Luis Almagro and lawmakers from the ruling coalition.

Astori pointed out that the path chosen for the incorporation of Venezuela “could have important consequences for the future, since the institutional framework of Mercosur is so weak that it becomes useless”.

Regarding the open discrepancy with President Mujica, who argued the support for Venezuela was a “political decision” and the result of a long “transaction”, Astori revealed that the differences were discussed at the ministers council on Monday, but “in my opinion, following this very serious institutional blow any thing can be expected from now on, since there is no major ruling from Mercosur left to be violated”.

The Uruguayan Vice president also underlined he didn’t like the fact that the rest of the presidents had taken advantage of Paraguay’s suspension “to support a resolution which the very Paraguayan parliament had somehow vetoed”.

The decision to incorporate Venezuela in the conditions it happened “has already been taken”, nevertheless Astori is hopeful it can be reversed: “hopefully something can be done to revert it, if that possibility existed I believe it must be explored”, said the Uruguayan Vice president.

“Uruguay went with the position of disagreeing with the incorporation of Venezuela taking advantage of the current situation, but things happened in a different way. Minister Almagro continues to stand in discrepancy with the procedure. But the resolution adopted was another and we hope there is a chance of reversing the decision. Uruguay proposed July 31 for the final decision, so we have to wait and see if such possibilities exist”.

Astori also pointed out at the Council of Ministers some of the positive aspects of the Mendoza Mercosur summit: the possibility of bilateral trade agreements with third countries and having contained Argentina and Brazil’s intention to increase the common external tariff to its maximum (35%) which was finally negotiated “to use such an option but on 200 goods which have been added to the list of exceptions to be managed by each country member”.

The Uruguayan Vice president an economist and former Economy minister under the previous government of the current ruling coalition has been particularly critical of the limits imposed by Mercosur senior members Brazil and Argentina on Uruguay and Paraguay in trade terms.

This is extensive to the discriminatory (and unfounded) policies implemented by both countries limiting market access to Uruguayan exports, as well as Argentina’s whims when it comes to the approval of structural loans for the weaker asymmetrical economies of Uruguay and Paraguay.

Argentina with the silent consent from Brazil has also blocked the sale of Paraguayan energy to Uruguay; interrupted an international bridge with Uruguay for six years over the conflict of the construction of a pulp mill; has yet to fulfil its promises to dredge the access canal to Uruguay’s main grains’ port (which under the River Plate administration accord must have the support from both members) and is pushing for a tax data exchange agreement which could have significant effects for Uruguay’s real estate values and banking system.

The continuous pounding of Argentina, and more silent attitude but equally effective from Brazil has surfaced growing opinion for a review of Uruguay’s links with Mercosur, not necessarily abandoning the group but scaling down the relation to an “association” such is the case of Chile, which has a policy of lower tariffs, opening its market and trade agreements with the leading blocks of the world, US, China, EU, Canada, Mexico, Korean, Australia, etc.

Iran threatens to break off nuclear talks unless West lifts oil sanctions

Ultimatum comes as the second day of talks on Iran's disputed nuclear program got under way in

Iran warned on Tuesday that Western sanctions against the country's oil exports must be lifted and that their right to a civilian nuclear program recognized, or else Tehran could break off negotiations

Iran's delegation said a negative response from EU foreign policy chief Catherine Ashton, who is leading six-power group talking with Iran, would mean "the end of the negotiations in its current configuration.

The ultimatum came as the second day of talks on Iran's disputed nuclear program got under way in Moscow, after little progress was achieved on Monday.

Ashton has said the EU will not budge on an oil embargo set to go into effect July 1 unless Tehran agrees to limit its uranium enrichment to 20 percent.

Even as Iran was threatening to end talks, plans for another meeting in China in a few weeks time were under discussion.