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Mercosur presidents meet, stung by U.S. metal tariffs

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By Lisandra Paraguassu

BENTO GONÇALVES, Brazil (Reuters) – The presidents of South America’s Mercosur trade bloc meet on Wednesday under the cloud of tariffs restored by U.S. President Donald Trump on steel and aluminium imports from its two largest members, Brazil and Argentina.

Hobbled by political differences and government changeovers, the four-nation common market is not expected to take a joint stance against Trump’s surprise move on Monday, which shocked South American officials and left them scrambling for answers.

Argentine Production Minister Dante Sica said on Tuesday that Argentina and Brazil will hold a bilateral meeting at the summit to discuss the U.S. tariffs.

But Argentina’s President Mauricio Macri has less than a week left in office and his left-leaning Peronist successor, Alberto Fernandez, has sparred openly with Brazil’s right-wing president, Jair Bolsonaro, who called the incoming leader a “red bandit.”

Uruguay, where conservative President-elect Luis Lacalle Pou will take office in March, will be represented at the Mercosur summit by Vice President Lucia Topolansky.

Given the changeovers, the summit will not be able to agree on the main item on the agenda, reducing a common external tariff that has been in place for more than two decades and Brazil is pushing to lower, a senior Brazilian diplomat said.

Pedro Miguel da Costa e Silva, head of regional negotiations at Brazil’s foreign ministry, told Reuters that any decision would have to wait for the new Argentine government to lay out its policies.

On Thursday, the leaders of the four nations, including Paraguayan President Mario Abdo, will formally sign Mercosur’s free trade accord with the European Union, completed in June after 20 years of negotiations.

The agreement, currently undergoing legal scrubbing and translation into two dozen languages, must still be ratified by the legislatures of the Mercosur and EU member states.

The question is whether Fernandez, a protectionist, will try once in office to reopen the deal, as he has said he intends to do, to re-negotiate parts that do not suit Argentina.

(Reporting by Lisandra Paraguassu; Editing by Steve Orlofsky)

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