Brazil's Senate has finally approved the entry of Venezuela in the Mercosur bloc. The only hurdle remaining now is a vote from the Paraguayan Congress.
Brazilian advocates of the move, like Celso Amorim, the country's foreign minister, point out that this will make the bloc significantly larger and more powerful. For Brazil and Argentina, it could also pay handsomely if Venezuela complies with Mercosur rules and fully eliminates tariffs on imports from bloc countries: both already have huge trade surpluses with Venezuela and the latter exports basically nothing but oil.
There will be a price to pay, however. Mercosur acts as a bloc in trade negociation, i.e. no member country can sign an agreement with anybody without the other bloc members agreeing to it. For the foreseeable future, this will mean making deals that Hugo Chavez approves of. And the problem is, Venezuela has very little at stake in trade negotiations, because markets are fully open to the only thing it exports, namely its thick oil. In other words, it is free to be as rigid as it likes. Clearly, moreover, Venezuela under Chavez appears keen on doing just that.
For a recent example, take Copenhagen. Everybody agrees that the agreement is at best a rough starting point. At least, arguably, everybody appears willing to start something. But wait a bit: not everybody. Out of 193 countries, five refused to sign the agreement: Bolivia, Cuba, Nicaragua, Sudan and Venezuela. But for Sudan--which also enjoys a perverse kind of "freedom" thanks to its oil--, this little club is Chavez' club.
Dear Argentina, Brazil, Paraguay and Uruguay: unless the Paraguayan Congress holds out indefinitely, expect more of the same on everything that Mercosur gets involved with. One more nail on the bloc's coffin?
Photo Jonathan Blair
