EUROPEAN PARLIAMENT 2009-2014 Delegation for relations with Mercosur: MISSION REPORT following the visit to Paraguay and Uruguay of 16-20 February 2015 Delegation for relations with Mercosur: Members of the mission: Francisco Assis (S&D) (leader of the mission) Carlos Zorrinho (S&D) David Borrelli (EFDD) I. INTRODUCTION A group of Members comprising three members of the Delegation for relations with Mercosur (DMER) visited Asunción (Paraguay) and Montevideo (Uruguay) on 16-20 February 2015. The group was led by the Chair of the DMER, Francisco Assis MEP (S&D, Portugal), and also included Carlos Zorrinho MEP (S&D, Portugal) and David Borrelli MEP (EFDD, Italy). II. SUMMARY ACCOUNT OF MEETINGS I) Asunción (17 and 18 February 2015) 1. Meetings with representatives of the Paraguayan executive 1.1. Audience with Horacio Cartes, President of the Republic The three members of the delegation met with the President of the Republic, Horacio Cartes, on Tuesday 17 February, at 9:00, in the López Palace. The meeting was also attended by the Ministers of the Presidential Department and Foreign Affairs, Juan Carlos López Moreira and Eladio Loizaga, respectively, as well as the Head of the EU Delegation, Alessandro Palmero. In his opening address, after highlighting the important role that smaller countries like Paraguay (which will hold the rotating Mercosur presidency in the second half of 2015) can play in deepening regional integration processes, Francisco Assis MEP, Chair of the DMER, set out the objectives of the visit: promoting parliamentary diplomacy to strengthen existing EU-Paraguay ties and contribute to progress with the negotiations relating to the future EU-Mercosur Association Agreement (AA). He also expressed the view that AAs boost the economy and employment, especially during a period of crisis like that still being experienced in Europe. He said that the path to Europe’s economic recovery was through increased exports and that the South American market was a natural destination for these. Therefore, the EU-Mercosur AA should be concluded quickly, before the potential signing of the Transatlantic Trade and Investment Partnership (TTIP) with the United States, the repercussions of which will be felt in future EU agreements with third countries. For his part, the President of Paraguay, Horacio Cartes, welcomed the Members and recalled his visit to Brussels in 2013, where he was received at the highest level in the EU institutions: Parliament, Council and Commission. He stressed that the interests of Paraguay are fully in line with those of the EU and expressed his support for the conclusion of a full and balanced AA, towards which the future Paraguayan presidency will spare no efforts. In relation to the country’s domestic situation, President Cartes described Paraguay as a land of opportunity, with low labour and energy costs, macroeconomic stability, a stable and strong currency, and low taxes that particularly favour foreign investment. He expressed the view that two different approaches co-exist within Mercosur: that of the larger countries – Brazil and Argentina – which are more protectionist, and that of the smaller countries – Uruguay and Paraguay – which are more in favour of trade liberalisation. Finally, President Cartes stated that the Pacific Alliance is the most dynamic body in the South American region and that he hopes Mercosur will head in the same direction. David Borrelli MEP asked a question about the security of foreign investments in the country. The president answered that foreign investors are welcome and that they will find legislation very favourable to their activities. PE528.288v01-00 2/27 CR\1058735PT.doc PT 1.2. Meeting with the Minister of the Interior, Francisco de Vargas After welcoming the Members, Mr Vargas detailed the main challenges faced by his department: drug trafficking, corruption, terrorist activity, etc. In relation to drug trafficking, Paraguay is both a producer country (cannabis) and a country of transit (cocaine originating in the Andean countries and destined for Brazil, Europe, Africa and the Middle East). The area of drug cultivation also corresponds to the area of influence of the small group known as the ‘Paraguayan People’s Army’ (EPP). This group, which has little more than a hundred adherents – 58 of whom are in prison – identifies with the principles of Marxism-Leninism and armed struggle. It is also said that the EPP has contacts with the Revolutionary Armed Forces of Colombia (FARC) and, naturally, with drug trafficking. The creation of the Joint Task Force (FAC), which brings together police and military forces, represents a serious threat to continued terrorist activity in the country. Corruption is an endemic evil, encouraged by the existing impunity. One of the main objectives of the Cartes government is – and rightly so – combating the corruption that has infiltrated state institutions to a large degree. Finally, Mr Vargas expressed his delight at the EU’s support for Paraguay in this regard. Speeches by Francisco de Assis MEP and David Borrelli MEP. 1.3. Meeting with the Minister of the Technical Secretariat for Development Planning, José Molinas During the meeting with the Members, Mr Molinas made particular mention of the National Development Programme (PDN) that will be in force until 2030. The PDN has three essential objectives: reducing economic and social inequality, economic growth, and Paraguay’s full entry into the international economic system. Mr Molinas also stated that Paraguayan society is currently experiencing a favourable period of growth, which is translating to considerable economic growth, and to reductions of 50 % in poverty and of 40 % in extreme poverty. He also mentioned the importance of education and the need to invest in the education sector. Speeches by Francisco de Assis MEP and David Borrelli MEP. 1.4. Meeting with the Minister for Foreign Affairs, Eladio Loizaga The Members present and Mr Loizaga believe that the historical and cultural links shared by Europe and Latin America fully justify a privileged relationship between both sides of the Atlantic. Mr Loizaga then mentioned Paraguay’s full reintegration into South American institutional structures (Mercosur, USAN), the country’s desire for regional integration within Mercosur to progress, the dynamism of the Pacific Alliance, and the extremely important role that parliamentary diplomacy can play. As regards Paraguay’s upcoming tenure of the rotating presidency, he said that he would spare no efforts to make progress towards concluding an AA in the EU-Mercosur negotiations, and that starting Mercosur-Pacific Alliance convergence should be another priority of the aforementioned presidency. Speeches by Francisco de Assis MEP and Carlos Zorrinho MEP. 2. Meetings with representatives of the Paraguayan legislature 2.1. Meeting with the President of the Senate, Blas Llano With the Members, Senator Llano tackled issues relating to Paraguay’s domestic situation and its relations with the EU. As regards the first issue, he talked first about the elections scheduled in the country for 2015 (primaries for the parties in July, then municipal elections in November), then about the country’s reasonable economic growth (in contrast with a third of its population living in poverty), then about the need for foreign investment in the country and for it to enjoy legal guarantees, next about combating corruption, and finally about the need to reform the legal system. With regard to EU-Paraguay relations, Senator Llano expressed the legislature’s full support for signing the EU-Mercosur Association Agreement and also promised to examine, alongside other parliamentarians, the possibility of establishing an EU-Paraguay Friendship Group in the Paraguayan Congress. 3. Other meetings 3.1. Working lunch with the President of the Electoral High Court (STE), Jaime Bestard At the working lunch, Mr Bestard told the Members about the workings of democracy in the country and the prospects for future elections. He particularly emphasised the implementation of electoral reform based on the proposals formulated by the EU Election Observation Mission (EU-EOM), whose presence during the 2013 elections was greatly appreciated. Some of the proposals made by the EU-EOM will be implemented as early as the 2015 municipal elections, but the bulk of them will only be transposed into Paraguayan electoral law for the 2018 general election. The most significant of these reforms are: increasing the independence of the Electoral High Court (STE), improving the electoral register, establishing penalties and implementing more effective rules for political parties and their funding. 3.2. Meeting with representatives of Paraguayan civil society At this meeting, the Members discussed the following issues with representatives of the civil society organisations present: human rights situation, workings of democracy, education system, fiscal policy (emphasising the tax inequality existing in the country), judicial and electoral reforms, threats to the environment and the situation of indigenous communities. The civil society representatives thanked the EU for its support for their activities. 3.3. Meeting with ambassadors of the Member States represented in Paraguay The Members were able to exchange impressions with diplomats from the Member States represented in Paraguay and with Alessandro Palmero, Head of the EU Delegation in Asunción. It was essentially matters of Paraguayan domestic politics and the country’s relations with the EU that were discussed at this meeting. In relation to the former, the ambassadors talked about the Cartes government’s efforts to reduce poverty, increase transparency, combat corruption, diversify the economy and bring Paraguay fully into the international community. It is a favourable period, but the country will have to overcome numerous imbalances resulting from the weakness of its institutions, the lack of legal certainty, the difficulties of the legal system (court rulings are not complied with), the need for electoral reform, the low tax burden (limited to 13 %), etc. In this regard, the country has some advantages, such as a young population, a growing economy and a more active civil society.