Venezuela Urges United Response to Food and Energy Crises at MERCOSUR Summit

At the 35th Summit of the Common Market of the South (MERCOSUR) on Tuesday, Venezuelan President Hugo Chávez advocated deepening South American independence from imperialist countries through united responses to social problems.
10 South American countries agreed to allow passport-free cross-border travel at the MERCOSUR summit Tuesday.

Mérida, July 2, 2008 (– At the 35th Summit of the Common Market of the South (MERCOSUR) on Tuesday, Venezuelan President Hugo Chávez advocated deepening South American independence from imperialist countries through united responses to social problems.

“Today South America is much more politically independent than ten years ago,” Chávez declared at the summit, which took place in the Argentine province of Tucumán. “However, we still need to be each day more independent.”

Chávez proposed that South American state-owned energy companies form “PETROSUR,” which he described as “a type of South American OPEC.”

Such an organization could help pool oil profits, which surpassed $144 per barrel worldwide this week, into an emergency food fund, Chávez explained. He reiterated Venezuela’s previous offer to contribute one dollar per barrel sold above $100 to increase food production and alleviate shortages in South America.

At current rates, this would amount to $920 million per year, which Chávez called “a modest figure for the magnitude of the task that lies before us, but we are willing to do this right now as long as there is a group of countries that will unite in a plan to produce foods in emergency.”

Vowing to end Venezuela’s dependence on oil production, Chávez has invested heavily in Venezuela’s weak agricultural sector in past years. Amidst recent global food shortages, he has also been a fierce opponent of corn-based ethanol, which he says push up the price of food by diverting the supply of essential grains.

Brazil, one of the world’s largest producers of sugar cane-based ethanol, denied that the production of this bio-fuel causes food shortages. Tuesday, Brazilian Foreign Minister Jorge Taiana blamed the food crisis on agricultural subsidies in rich countries which “for more than 50 years” have “distorted the world market” and undermined the agricultural capacity of food exporters like Brazil.

Following a trilateral meeting among Chávez, Argentine President Cristina Fernández de Kirchner, and Brazilian President Luiz Inacio “Lula” da Silva Tuesday, Chávez vowed to propel an “axis of growth” connecting Brazilian industry, Argentine agriculture, and Venezuelan energy.

This would benefit MERCOSUR countries as well as “all the countries in the Southern hemisphere,” where “the Peoples…have elected presidents with similar principles and objectives,” said the Venezuelan leader.

Venezuela also expressed interest in Argentina and Brazil’s plan to conduct business in their national currencies rather than dollars in order to promote monetary independence and reduce dollar conversion costs, which particularly affect small and medium-sized enterprises. Some analysts view the measure as a step toward a European Union-style unified currency.

Lula reiterated Tuesday that he believes Brazil’s congress will soon endorse Venezuela’s membership in MERCOSUR. Venezuela has long aspired to become a member and currently awaits the approval of the Brazilian and Paraguayan legislatures. Lula said that an obstacle has been that private businesses were startled by Chávez’s wave of nationalizations over the past year and a half.
To assuage these fears, Chávez offered a bright forecast for his government’s indemnity negotiations with Argentine-controlled Techint for the recently nationalized SIDOR steel plant.

“Sidor is in the past,” said Chávez, suggesting that an end to the negotiations is near. “I want to arrive at a friendly solution.”
In addition, Venezuelan Foreign Minister Nicolás Maduro and Minister Taiana, met with a group of 70 Argentine business leaders Wednesday to discuss future economic accords between the two countries.

So far this year, Venezuela has signed agreements to provide Argentina with oil in exchange for agricultural technology and training and the Venezuelan and Brazilian state oil companies have formed a mixed enterprise to build a 200,000-barrel per day refinery in northern Brazil. Venezuela and Ecuador also plan to build a joint refinery in Ecuador with a 300,000 barrel per day capacity beginning this July 15th.

Chávez declared Tuesday that “Venezuela already feels a part of MERCOSUR.”

According to Foreign Minister Taiana, regional integration should go beyond MERCOSUR. “There has always been a vision that commercial accords are the only energizing variable of integration,” said Taiana at the summit, “but what is clear today is that this integration process is much broader… [it includes] the social, cultural, and political fields.”

All 10 countries signed an accord Tuesday to allow citizens to cross national borders without a passport, although some countries will still require visas. MERCOSUR members Brazil, Argentina, Uruguay, and Paraguay already use this system, and now Bolivia, Chile, Peru, Ecuador, Colombia and Venezuela are on board.

These countries also signed a joint declaration condemning the European Union’s recent immigration law, which threatens to incarcerate illegal immigrants. The South American countries “reject any attempt at the criminalization of irregular migration and the adoption of restrictive migratory policy, particularly toward the most vulnerable sectors,” the declaration reads.

President Chávez insisted that the united response of Latin American countries “cannot remain quiet or limited to protest” against this “barbarian measure.” Last week, Chávez threatened to cut off oil supplies and close off investment opportunities to countries that carry out the immigration law.  

Chilean President Michelle Bachelet urged that South America “raise a common voice” against “racism, discrimination, xenophobia, and other forms of intolerance” symbolized by the law.