Factory dispute seen as impediment to South American integration
By Kari Huhta in Montevideo and Buenos Aires
The former casino hotel Parque is living a quiet existence on the shoreline drive in the Uruguayan capital Montevideo.
The building was to have been a symbol of the economic and political integration of South America in the 1990s when it was turned into the headquarters of Mercosur, the South American trade organisation.
In a way, it actually is a symbol. Dating back to the early 20th century, the building looks impressive on the outside, but little is happening on the inside.
More than 200 million people live in the Mercosur area, but only about 30 work at the organisation's secretariat. The European Commission, for instance, employs more than 20,000 people.
And the Mercosur building is becoming even quieter, as the dispute over the Botnia pulp mill affects the integration projects for South America.
"There has been some regression in Mercosur", admits Ambassador Carlos Amorin, who is responsible for Mercosur at the Foreign Ministry of Uruguay.
Things looked promising in the beginning. The Mercosur customs union was established at the initiative of Argentina and Brazil in 1992 with the purpose of freeing trade and bringing the countries of Latin America closer together. The dictatorships had gone away and faith in free trade remained strong. Internal trade within Mercosur increased many times over.
In addition to Argentina and Brazil, the smaller countries Paraguay and Uruguay were let in.
According to Amorin, the downward trend for integration began with the economic collapse of Brazil and Argentina at the turn of the millennium, when both countries put up barriers to imports.
A new rise appeared to be sprouting about two years ago. Venezuela's energetic leftist President Hugo Chávez saw Mercosur as a good tool for challenging the influence of the United States in Latin America. Venezuela was allowed to join Mercosur last year.
Chávez won support for his aim of politicising Mercosur mainly from Argentine President Néstor Kirchner. Brazil's Luiz Inácio Lula da Silva is taking a more restrained view.
The dispute over the pulp mill, which is being built on the Uruguayan side of the river forming the border between Uruguay and Argentina, is something that Chávez could do nothing about. The political unification of Mercosur is difficult as long as Argentina and Uruguay are not on good speaking terms.
The Botnia mill is being built in Uruguay in spite of the opposition of Argentina. In protest, Argentines are blocking bridges over the river, even though a Mercosur court of mediation has demanded the dismantling of the roadblocks.
Examined from Montevideo, Mercosur appears to be a rather useless organisation, even though there are official assurances of allegiance to it.
"We are committed to unification. For us, Mercosur is one way to become unified with the rest of the world", says José Luis Cancela of the Uruguayan Foreign Ministry. He refers to direct trade talks with the EU, for instance.
Argentina is not officially linking the pulp mill dispute with the problems of Mercosur.
"If there are concerns in Uruguay, it is because Mercosur has not completely lived up to expectations, and at the same time there is the mill dispute. These things cannot be linked", says Nelson Martin, who has assessed the state of Mercosur at the Argentine Foreign Ministry.
In his view, the dispute "has to be solved in the short, or medium-range time frame".
Cancela in Uruguay says that he wants a solution to the dispute "as soon as possible".
Neither of the two have a proposal on how to achieve this.
Helsingin Sanomat / First published in print 25.3.2007
Previously in HS International Edition:
Solution to paper factory dispute between Argentina and Uruguay more remote than ever (7.3.2007)
King of Spain to mediate in Metsä-Botnia pulp mill dispute (6.11.2006)
Pulp mill dispute between Argentina and Uruguay intensifies (12.4.2006)
Pulp mill protesters dismantle one roadblock on Argentina´s border with Uruguay (22.3.2006)
Up to 10,000 demonstrate in favour of Botnia pulp mill in Uruguay (17.3.2006)
Metsä-Botnia continues construction of Uruguay pulp mill despite appeal by two presidents (13.3.2006)