Venezuela Reaches Protocol Agreement With Mercosur

Caracas, Venezuela, May 25, 2006—Yesterday,Venezuelan President Hugo Chávez announced that Venezuela has agreed to a protocolthat outlines how the country will become a full member of the trade blocMercosur.

“Last night, the protocol of Venezuela’s incorporation intoMercosur… [was] approved in Buenos Aires. This is historic,” said Chávez at a pressconference in the presidential palace Miraflores. “Venezuela’sintegration is a fundamental step towards which we have worked with dedicationand passion for seven and a half years.”

Last December, the South American nation was put on trackfor being a voting member, but the countries that comprise Mercosur, Brazil,Argentina, Uruguay and Paraguay, had not agreed on terms until Tuesday. InJuly, Mercosur’s presidents are expected to ratify the document.

The agreement has still not been released in its entirety,according to the Ministry of Communication, but reports say Venezuela mustadopt common external tariffs in four years, and will continue integratingeconomically into the blocks for several years after.

Recently, Chávez stirred up controversy by withdrawing fromthe Community of Andean Nations (CAN) and a trade group consisting of Venezuela, Mexicoand Colombia, known as G-3.At the press conference, he reiterated that the CAN’s “death” was caused not byhis country’s sudden withdrawal, but by Free Trade Agreements between Peru and Colombiaand the United States.The G-3, he said, only benefited Mexico,and had never helped Venezuelaor Colombia.

But Chávez contends that Mercosur is a different type ofagreement. “Mercosur doesn’t ask any country to modify anything,” he said,referring to conditions normally put on Free Trade Agreements with the United States.

He also spoke of Mercosur as a wall, rather than, as istypical with trade agreements, the breakdown of barriers. “Now we’re protectedby the Mercosur wall from the invasion of products from the United States to Colombia,” he said.

Indeed, a quote from the partial release of the protocolsays, “The process of negotiation considered at all times that integrationneeds to be an instrument to promote integral development, confront poverty andsocial exclusion and bested in contemplation, solidarity and cooperation.”

As of yet, it is unclear which Venezuelan industries willbe protected in Mercosur, and which will see trade barriers removed betweenother countries. The government has repeatedly promised to protect manyindustries, including agriculture.

Chávez sees Venezuela’s integration in thegroup as critical to its success. “No country is better situated than Venezuela, froma geographic, geopolitical, or economic point of view, because of the resourcesit has, and [its social factors]. [Its] people have woken up, and now arebuilding a full and open democracy, in order to contribute, as if it weremachinery, to the union of nations which form Mercosur and help speed up theintegration of all South America in a block that we need,” said Chavez.

Chávez added that the block was “necessary to convertSouth American into a power.” The Venezuelan president has maintained duringhis presidency that in order to combat the hegemony of the United States, a world with multiple powerpoints is necessary, including another one in the Americas. At the conference, hecircled the US and Canada on amap, and said they would always be a power.

Several trade disputes in recent years have led someanalysts to question the effectiveness of the group, despite a steep jump intrade between the Mercosur countries.