“CAN-Mercosur Agreement Revitalizes the Integration of Latin America”

Interview with Victor Alvarez, President of Venezuela's Exterior Commerce Bank (Bancoex) and chief trade negotiator.

On Tuesday, December 16th, Venezuela signed an agreement reached between the countries of the Community of Andean Nations (CAN) and of Mercosur (see: Latin American Integration Takes a Big Step Forward.) The agreement was greeted positively even by Venezuela’s oppositional chamber of commerce Fedecamaras. Víctor Álvarez is Venezuela’s chief trade negotiator and had the following to say about the agreement.

How does this agreement relate to the FTAA and the ALBA (Bolivarian Alternative for the Americas)?

Víctor Álvarez: We have given preference to the integration of Latin America, in particular of South America, in the face of the Free Trade Area of the Americas (FTAA) proposal. The FTAA is a proposal for hemispheric integration where very weak countries would be obligated to compete in equal conditions with the most powerful economic force in the world.

The CAN-Mercosur integration is a very concrete manifestation og the birth of the Bolivarian Alternative for the Americas and the Caribbean (ALBA), which is the first priority for the Venezuelan government. The signing of this agreement must be understood and interpreted as a manifestation of this process of Latin-American and Caribbean integration.

It is also a step forwards in defeating the FTAA, a proposal which in no way takes into account the different levels of development of the countries. It is very unlikely that an integration agreement would be an opportunity for the countries that sign it if these are separated by enormous disparities in their levels of development and great asymmetries in the size of their economies and if, in addition, there are no mechanisms to correct this.

How to correct the disparities?

Venezuela is proposing three essential aspects. The creation of structural convergence funds, which would foresee funds for investment in infrastructure and basic services which support production. That integration agreements are turned into a real opportunity for our countries to increase their exports. And a growing investment in human capital.

The CAN-Mercosur agreement takes inequalities between countries into account?

If there is anything that the agreement that we sign takes into account, it is the different sizes of the economies and their levels of development. The treatment that is being given to countries such as Paraguay, Uruguay, Bolivia, and Ecuador — economies that are smaller and relatively less developed — expresses the principle of solidarity, which should rule if we want an integration agreement that is a win-win alliance, not where some win and others lose. The CAN-Mercosur agreement follows the line of the ALBA. It is no longer a dream or a hope; it is the birth of the ALBA. That’s how we see and value it in Venezuela.

ALBA denies the FTAA?

The ALBA openly differentiates itself from the FTAA. Its essence is the preferential and differential treatment, which it gives the smaller and relatively less developed countries. It is not the “Anti-FTAA.” It is different because it is based on solidarity between peoples, not on the cult of free trade and the invisible had of the market. Its objective is the struggle against poverty and social exclusion, to create a zone free of poverty, unemployment, illiteracy, malnutrition. On the other hand, the FTAA simply seeks the total and absolute liberalization of trade and of investment in the hemisphere, which only serves the large transnational corporations which are the one that are capable of taking advantage of an open and unrestricted market. The objective of the FTAA is a free trade zone.

How is Venezuela’s position perceived in Latin America?

At first it was very solitary, but increasingly it is being accompanied by different countries. The proposal of Mercosur, led by Brazil, is very much in line with that which President Chavez first proposed at the presidential summit in Quebec, Canada, in 2001. We continue to deepen the ALBA. Just as we have worked intensely in the CAN-Mercosur, so we will with Caricom (the Caribbean Community) and Central America. Venezuela will advance in the development of its focus: an integration based on solidarity and the struggle against poverty and social exclusion; the integration of Latin America and the Caribbean above everything else. In parallel we continue to negotiate on the FTAA, but in the sense of transforming its initial proposition from the roots.