NewsLatin AmericaA toll on Mercosur's main waterway triggers a crisis among its members

    A toll on Mercosur’s main waterway triggers a crisis among its members

    Paraguay, Brazil, Uruguay and Bolivia issued a joint statement to urge Argentina to cease the application of a unilateral toll on the Paraguay-Parana waterway, Mercosur’s commercial axis. Asuncion requested international arbitration and an Argentine delegation traveled to Paraguay to reduce the accumulated tension. A working table has been set to discuss the disagreement.

    4 min

    Mercosur’s main river route is at the epicenter of a diplomatic dispute between Argentina and its bloc partners.

    The Parana-Paraguay Waterway, 3,400 kilometers long and with river ports in Bolivia, Paraguay, Brazil, Uruguay and Argentina, connects with the Atlantic Ocean. The natural corridor is of primary importance for the countries of the commercial alliance. However, it has crystallized criticism since Argentina decided to implement a toll on the waterway. Tensions that have increased in recent days.

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    It all started on January 1, 2023, when the Port Administration, which depends on the Argentine State, began to collect a toll from ships. Vessels have to pay $1.47 per ton transported. A price questioned from the beginning by the countries impacted by the measure. The installation of the toll was done unilaterally and the price was never agreed upon.

    Argentina justifies the toll for maintenance reasons

    The southern country justified this decision by arguing the necessary maintenance of the waterway as it passes through Argentine territory. In 2009, the Argentine State committed to carrying out these works for a period of three years. The investment cost Argentina around 20 million dollars annually. Until the implementation of the toll, the ships did not make any contribution while, between January and July of this year, the Argentine Port Administration collected about 11 million dollars.

    A cargo ship anchored in the Parana River, in San Lorenzo, north of Rosario, in the Argentine province of Santa Fe, on December 22, 2020 (Photo by Marcelo MANERA / AFP) © MARCELO MANERA / AFP

    Tension increased in recent months until it became a diplomatic crisis between Argentina and its neighbors, Paraguay in particular. Last week, Argentine authorities detained a Paraguayan ship transporting 30 million liters of fuel to Asuncion, the Paraguayan capital. The barge tried unsuccessfully to avoid the toll. Although the company that owns the ship agreed to pay the $27,000 that was requested, the Argentine authorities detained the vessel for a few more days.

    Paraguay has the support of three other Mercosur countries

    This is the third Paraguayan barge seized by the Argentine authorities by court order, too much for the Paraguayan president Santiago Pena, who decided to personally intervene in his X account, former Twitter. “We have the obligation to defend the Paraguayan State and the interests of all Paraguayans,” he said on Friday, September 8.

    In another tweet, he commented: “We have decided to file a lawsuit before the Mercosur Court against Argentina for non-compliance with the Treaty of Asuncion, which guarantees free trade and the free navigability of our rivers,” stating that he is willing to request international arbitration. to solve the problem. The Paraguayan Foreign Ministry also summoned the Argentine ambassador twice in the last seven days to address the problem.

    The diplomatic dispute culminated on Monday, September 11, when Paraguay found the support of three other Mercosur partner countries impacted by the measure. Paraguay, Brazil, Uruguay and Bolivia issued a joint statement to urge Argentina to stop applying the toll. The document, shared by President Pena on his social networks, reiterates the request to the Argentine Government to “adopt necessary measures to guarantee freedom of navigation and transit” on the waterway.

    Ministerial visit to Asuncion to reduce tension

    In the midst of growing tensions, Argentine Energy Secretary Flavia Royon traveled to Asuncion on Monday, September 11, to calm the situation. After a meeting with the Paraguayan Foreign Minister, Ruben Ramirez Lezcano, Royon described the meeting as “very positive” and announced the creation of a working group to discuss, among other issues, the toll rate.

    Although Paraguay has stated that it is open to dialogue with its neighbor, the country has maintained its position: “The waterway is governed by an international treaty. They cannot independently apply something like they can do within their territory,” Claudia replied. Centurion, Minister of Public Works of Paraguay.

    The Yacyreta dam, a means of pressure on Argentina

    The pressure on Argentina has redoubled in recent days. Santiago Pena decided to open one of the spillways of the binational Yacyreta dam, located on the Parana River, on the border between Paraguay and Argentina. The measure had the effect of reducing the amount of electrical energy available to Argentina.

    In normal times, Paraguay sends 90% of the energy generated by the hydroelectric plant to its neighbor. Without this source, Argentina is forced to buy energy from Brazil, paying a higher price.

    Binational Argentine-Paraguayan Yacyreta Dam, in Ayolas, Paraguay, taken on May 30, 2022. (Photo by Norberto DUARTE / AFP)

    Binational Argentine-Paraguayan Yacyreta Dam, in Ayolas, Paraguay, taken on May 30, 2022. (Photo by Norberto DUARTE / AFP) © NORBERTO DUARTE / AFP

    The Paraguay-Parana waterway is of vital importance for certain Mercosur countries. Despite having a long Atlantic coast, 80% of Argentina’s agricultural exports leave through this river route to the Atlantic.

    For Paraguay, which does not have access to the sea, this natural corridor is even more key. The waterway allows the Latin American country to export products such as soybeans or coal while primary materials that the country does not have, but needs, such as oil, enter through there.

    With EFE and local media

    Source: France 24

    This post is posted by Awutar staff members. Awutar is a global multimedia website. Our Email: [email protected]


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