Second, it was decided to consider a possible capitalization of the FOCEM, and a review of the contributions and resources received by each country in light of the incorporation of new States Parties.
Third, four projects were approved to be part funded by the FOCEM: (1) Railroad II Rehabilitation (Piedra Sola-Tres Árboles-Algorta-Paysandú and Queguay-Salto-Salto Grande sections) (US$127.3 million, two-thirds of which will be financed by the FOCEM); (2) Building Infrastructure for the Protection and Promotion of Human Rights in MERCOSUR (US$503,000, provided almost entirely by the FOCEM); (3) Arturo Jauretche National University Local and Regional Development Hub in the district of Florencio Varela (US$26.5 million, 53% of which is to come from the FOCEM) to seek social promotion for the most vulnerable sectors; and (4) Integrated Urban Sanitation in Aceguá (Brazil) and Aceguá (Uruguay).
There have been some important recent developments relating to the external agenda. On the one hand, MERCOSUR formally requested at the Summit the bloc’s participation as an observer in the Pacific Alliance, after Uruguay did so individually. The CMC also decided that the Co-operative Republic of Guyana and the Republic of Suriname may participate as guests at MERCOSUR meetings to discuss areas of common interest.
On the other hand, in recent months, some of the MERCOSUR economies have recently been involved in questions in the framework of the World Trade Organization (WTO) over measures applied both by them and by some trading partners.
At the Council for Trade in Goods meeting
, November 26, the European Union (EU), with the support of other countries, expressed its concern about the use of the Industrial Products Tax (IPI) by Brazil to protect its automotive sector, given that the amount to be levied is reduced the higher the national content of automobiles. Brazil, for its part, argued that the incentives of the Innovar Auto
program, which aims to encourage technological development, are compatible with the rules of the multilateral trading system, since they depend on vehicles’ energy efficiency. At the same meeting, Brazil and Paraguay, together with 21 countries, signed a declaration urging Ukraine to reverse its intention to renegotiate commitments consolidated with the WTO. Uruguay also supports this initiative.
The WTO’s Dispute Settlement Body (DSB) saw some formal complaints involving Argentina, after no agreements were reached in consultations with their trading partners. On the one hand, Mexico
, United States
, the EU
, and Japan
requested an arbitration panel be set up to examine various measures imposed by Argentina on its foreign purchases. Similarly, Panama
requested from the WTO consultations on certain restrictions that Argentina is allegedly applying to imports of goods and services. On the other hand, Argentina formally sued
United States before the WTO for preventing the entry of meat and fresh lemons from Argentina, and the EU and Spain for the restrictions imposed on the importation of Argentine biodiesel.
Similarly, Argentina and Mexico agreed
restart trading in the automobile sector, after the former suspended the application of Economic Complementation Agreement (ECA) No. 55 in the middle of this year. However, free trade as envisaged in ECA-55 will not apply; instead a quota will be set whereby Argentina may import from Mexico automotive products worth US$600 million (a reduction of 33%) over the next three years. In addition, the regional content to benefit from the agreement will go from 30% today to 40% by 2016.
Other relevant topics on the domestic agenda
Argentina became the first State Party to approve the MERCOSUR Customs Code
, and there were two important meetings between the authorities of some of the bloc’s countries.
On the one hand, the presidents of Argentina and Brazil, Cristina Fernández and Dilma Rousseff, spoke at the 18th Argentine Industrial Conference. Both leaders stressed the importance of the bilateral relationship and, among other relevant aspects, the need to overcome the obstacles to integration between the two countries, to promote permanent dialogue between the public and private sectors, to strengthen the industrial sector through productive integration and the development of infrastructure, to stimulate innovation. The drop in bilateral trade (13.6% YOY between January and November of this year) is due, in Rousseff’s opinion, to the contraction of activity in the two countries and to administrative barriers to trade.
On the other hand, Brazil and Uruguay
adopted an additional protocol for the free movement of goods and services, which provides, among other relevant aspects, for mechanisms and procedures on rules of origin, sanitary and phytosanitary measures, and anti-trust legislation. The two countries also made progress in the bilateral agenda in terms of productive integration, specifically as it relates to science and technology, telecommunications, software, and shipbuilding.