Venezuela Reaches Protocol Agreement With Mercosur

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

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

Last December, the South American nation was put on track for being a voting member, but the countries that comprise Mercosur, Brazil, Argentina, Uruguay and Paraguay, had not agreed on terms until Tuesday. In July, 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 must adopt common external tariffs in four years, and will continue integrating economically into the blocks for several years after.

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

But Chávez contends that Mercosur is a different type of agreement. “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 is typical with trade agreements, the breakdown of barriers. “Now we’re protected by 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 protocol says, “The process of negotiation considered at all times that integration needs to be an instrument to promote integral development, confront poverty and social exclusion and bested in contemplation, solidarity and cooperation.”

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

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

Chávez added that the block was “necessary to convert South American into a power.” The Venezuelan president has maintained during his presidency that in order to combat the hegemony of the United States, a world with multiple power points is necessary, including another one in the Americas. At the conference, he circled the US and Canada on a map, and said they would always be a power.

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