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Venezuela again stopped at Mercosur's door

disclaimer: image is for illustration purposes only
by Staff Writers
Caracas, Venezuela (UPI) Aug 6, 2010
Venezuela suffered a fresh setback to its bid for full membership of Latin America's premier trading bloc, Mercosur, as a deeply politicized Paraguayan Parliament again held back on ratification necessary for the joining process.

Venezuela became a member in 2006, but its full affiliation hinges on Paraguay, the last of the four full members, fulfilling a treaty requirement and giving its go-ahead. The other three -- Argentina, Brazil and Uruguay -- voted Venezuela in earlier but, Paraguay's President Fernando Lugo faces stiff opposition in Congress as well as from his Vice President Federico Franco.

At issue is not the state of Venezuela but the political style of President Hugo Chavez. Opposition critics in Asuncion, the Paraguayan capital, see Chavez as undemocratic and fear his arrival will unravel Mercosur. Latin American visionaries see Mercosur as a mirror of the European Union and argue the entry of Chavez will be the undoing of the trade pact.

Only last week Mercosur leaders met in Argentina and pledged to work toward a full customs union as a step toward economic and political integration of the member states.

Despite strong sentiment against the populist Venezuelan leader, pragmatism prevailed in other Mercosur member countries, driven by the promise of lucrative trade with oil-rich Venezuela and its burgeoning middle and upper classes. Pragmatists argue that leaders come and go, but Venezuela's market offers major long-term opportunities.

Venezuela's entry will open its economy to merchandise and services from the four member countries as well as associates Bolivia, Chile, Colombia, Ecuador and Peru.

Senate officials said negotiations over Venezuela joining had not matured enough to justify the Congress taking the issue forward.

Franco this week reiterated he would oppose Venezuela joining Mercosur as full member but left the issue in the hands of the Senate. "My position is very clear," he said. "Everybody knows what I think of President Chavez," he added.

He said he thought it "ironic" that the well-being of Mercosur depends on the Senate of a small state like Paraguay because, he explained, the vote could be "salvaging or condemning Mercosur."

He cited what he called the Venezuelan leader's "anti-democratic attitudes" as the reason behind his opposition.

Lugo in contrast appealed to the Congress to approve Venezuela's incorporation and take account of a country with trade and investment advantages for Paraguay.

"I respect Parliament and they are free to address the issue," he said. However, logical arguments are necessary, he added, pointing out that Venezuela is a great market for foodstuff as it imports 80 percent of its needs and Paraguay as a leading exporter of grains, oil seeds and meats could fulfill some of those needs.

He called for a calm and dispassionate reassessment because, even as Chavez was in office now, what mattered more was that Venezuela would remain on the scene in the longer term.

Mercosur membership is crucial to Chavez's plans for retaining control of the Venezuelan Legislature before the Sept. 26 elections to the National Assembly. Chavez is already feeling financial pressures after the state-run Petroleos de Venezuela SA reported a major drop in earnings last year. PDVSA said its earnings in 2009 totaled $4.49 billion, down from $9.41 billion in 2008.

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