Navigating the Diplomatic Waters: Brazil and the U.S.

 The Mercosur Waterways diplomatic crisis refers to a regional conflict between Argentina and other nations in the Río de la Plata Basin. The dispute revolves around the issue of unrestricted navigation in the rivers of the region. The countries involved in this conflict include Paraguay, Bolivia, Uruguay, and Brazil, all of which are part of the primary waterway of Mercosur. Mercosur has requested the unilateral removal of tolls on the Argentine sector of the waterway, citing the possible harm it could cause to the region's development, trade, and economic integration. The Permanent Transportation Commission of the La Plata Basin (CPTCP), consisting of the users of the navigable waterway from the five signatory countries of the agreement, has officially confirmed that the river in the Santa Fe-Confluencia section possesses hydro-morphological conditions that naturally provide sufficient depths for safe navigation of vessels with a draft of 10 feet for 24 hours, without requiring any dredging interventions. Similarly, it was emphasized that "given the existing technology, there is no need to offer the beacon service for that particular sector."

The outcome of the 2023 Argentine general election 

When Javier Milei unexpectedly won, has created uncertainty over the potential effects on the proposed Mercosur-European union trade agreement. Resolution No. 625/2022, issued by the Ministry of Transport of Argentina, was officially published in the official gazette on September 30, 2022. The toll collection on the Paraná River for ships navigating from the port of Santa Fe to the confluence with the Paraguay River was created. On December 30 of same year, the aforementioned bulletin published Resolution 1023/2022 of the Argentine State Secretariat, which officially confirmed the prices stated in the preceding provision. Starting on January 1, 2023, ships traveling between kilometer 1,238 and kilometer 584 of the river within Argentine territory will be subject to toll collection. Effective from 1 January 2023, a resolution of the Ministry of Transportation of Argentina has set a rate of US$1.47 (about 1.33 euros) per ton for international transport vessels and 1.47 Argentine pesos (equivalent to US$0.0054) per ton for domestic goods. The individual has breached multiple provisions of the Santa Cruz de la Sierra Agreement, also known as the HPP Agreement, which guarantees unrestricted international navigation on the Paraguay-Paraná waterway. This agreement is safeguarded by the Treaty of Montevideo of 1980. In late January, Paraguay and other regional corporations would begin to express their dissatisfaction and engage in protests

Uruguay and Bolivia allied themselves with Paraguay

Shortly thereafter, an international committee was established, which Brazil subsequently joined, to formally request the suspension of toll collection on the waterway. On July 29, 2023, the initial confiscation of a vessel named HB Grus, flying the Paraguayan flag, was documented. The ship was owned by the Brazilian shipping company Hidrovías do Brasil and was transporting a cargo of soybeans destined for Brazil. The vessel was apprehended and compelled to remit the toll for a duration of 10 days, resulting in financial damages amounting to 400,000 USD. Simultaneously with the incident, the ship HB Phoenix, which is registered under the Bolivian flag and is owned by the same Brazilian corporation, reported that the Argentine authorities attempted to confiscate it along its journey, until they successfully did so near the San Lorenzo toll area. The load consisted some Brazilian merchandise as well. Abani, the Brazilian Association for the Development of Inland Navigation, has called on the Brazilian government to organize a special meeting of the Paraguay-Paraná Waterway Agreement Commission. The purpose of this meeting is to formally present a complaint in response to the Argentine government's recent decision to impose tolls on ships traveling north of Santa Fe. Most of the ships impacted by this regulation are from Paraguay. Argentine shipping companies expressed their endorsement of the initiative, but acknowledged that the Ministry of Transportation went beyond the established tariff, resulting in a significant rise in costs for Argentine oil companies that import soybeans from Brazil, Paraguay, and Bolivia. Meanwhile, Paraguayan and Brazilian merchants argue that this provision violates treaties and multilateral agreements. They also point out that no substantial work has been undertaken to justify charging for this service.

Santiago Peña became the president of Paraguay on 15 August

Shortly after, on 24 August, Sergio Massa, the Argentine Minister of Economy, made a stopover in Paraguay during his trip to the United States to address IMF matters. Following his visit to Paraguay, he met with President Peña at the Mburuvicha Róga (the Paraguayan presidential residence). Minister of Transport, Pedro Giuliano, also attended the meeting. The purpose of the meeting was to discuss various projects, including the billion-dollar debt that Argentina owes Paraguay for energy from the Yacyretá Dam and tolls on the waterway. Following the conclusion of the meeting, Paraguayan media reported that tolls will be suspended for a period of 60 to 90 days as a means of resolving the problem.The user's text is enclosed in tags. Despite conflicting claims made by Sergio Massa at a news conference, the Argentine transportation ministry confirmed on 25 August that tolls on the waterway will not be abolished. A joint statement was made on September 10 by the governments of Paraguay, Brazil, Bolivia, and Uruguay. Expressing concern over the limitation of unrestricted river traffic and highlighting the potential challenges that these measures may pose for landlocked nations like Bolivia and Paraguay. Simultaneously, there are reports indicating that barges belonging to the Mercurio Group continue to be held in custody despite having already paid the toll. The Mercurio Group barges detained by Argentina were released on September 11. According to Flavia Royon, the Argentine energy secretary, the Argentine government justifies the toll collection as necessary to cover the expenses of dredging the waterway.The user's text is "[20]". Despite the fact that all Mercosur countries engage in dredging activities on rivers without imposing tolls, there is a contradiction. However, the Secretary of Energy's statement contradicts the claims made by the Argentine delegation on June 23rd. The Argentine delegation admitted that the toll rate does not correspond to dredging interventions and justified it by mentioning signaling services, frequent changes in routes, and an Automatic Identification System (AIS) that provides real-time vessel positioning and enables night navigation in that section. However, the delegation failed to provide evidence for these claims and was accused by other delegations and private users of being ineffective. From 2022 onwards, the Argentine State provided financial support for the dredging and beaconing of the segment, with an estimated cost of approximately US$20 million.


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