Today’s Zaman | 2 July 2008
Turkey wins stronghold in South American trade
Turkey has signed a preferential trade agreement with the South American trade bloc Mercosur during negotiations in Argentina.
Mercosur is a regional trade agreement (RTA) between Argentina, Brazil, Paraguay and Uruguay that was established in 1991 by the Treaty of Asunción, which was later amended by the 1994 Protocol of Ouro Preto. Its purpose is to promote free trade and the fluid movement of goods, people and currency. The presidents of Mercosur’s four member states convened on Monday for a two-day summit, seeking ways to further integrate their economies into a regional powerhouse.
Turkish foreign trade officials were also present at the meeting to finalize a preferential trade agreement. The latter will provide the basis for all future free trade agreement negotiations. The agreement is the outcome of an initiative first launched in August 2007 by the Foreign Ministry. Turkish exports to Mercosur states were around $171 million in 2006 and $304 million in 2007, while imports from the region by Turkey were around $1.3 billion in 2006 and $1.6 billion in 2007.
Mercosur is the third-biggest economic bloc in the world following the European Union and the North American Free Trade Agreement (NAFTA). Venezuela applied for membership in 2006, but its entry has not been ratified by Paraguay or Brazil. Chile, Bolivia, Peru, Colombia, Ecuador are associate members of Mercosur, while Mexico is an observer state.
The bloc has a market figure of around $1 trillion and a population of approximately 200 million.
Mercosur’s top agenda item is developing an approach to help member nations fight rising food prices and solve sporadic regional energy crunches.
According to the UN, food production must increase by 50 percent by 2030 to keep up with world demand. Mercosur issued a statement Monday noting that developed countries should slash subsidies to allow progress on the so-called Doha Development Round of talks, which aim to reduce trade barriers worldwide. The summit focuses on boosting regional integration, financing infrastructure projects and extending loans to small businesses that are unable to secure regular bank loans. "We’re at a turning point in the construction of our common market that will propel us beyond merely a commerce idea," Argentine Secretary of Trade and International Economic Relations Alfredo Chiaradia said in a report on the bloc’s progress of the last six months. Mercosur also announced that it has signed preferential trade accords with Jordan, Turkey and the Southern African Customs Union. Meanwhile, Uruguay has pushed to offer membership in the bloc to Mexico, Latin America’s second-largest economy after Brazil. Uruguayan President Tabare Vazquez said his Mexican counterpart, Felipe Calderon, was "very interested" in joining, although the idea is still in its initial stages. Mercosur approved Venezuela as a future member more than two years ago.