Brazil and Argentina Protectionism to Jump with Venezuela in Mercosur

Venezuela has become the fifth member of Mercosur, an addition that could accelerate the South American trade bloc’s steady drift away from free trade principles.

The presidents of the current members of Mercosur – Argentina, Brazil, Paraguay and Uruguay – signed last night, July 4, a treaty in Caracas with President Hugo Chavez.

The move combines South America’s largest oil exporter with two of the world’s largest grain and meat producers to create a grouping of some 250 million people.

Pavel Rondón, Venezuela’s deputy foreign minister for Latin America, said the move to become a full member the 15-year-old bloc would "open up a huge market…for the country’s businesses".

Mr Chavez said Venezuela’s entry into Mercosur marked "a new era in both Venezuelan and South American history", and added: "The union of South America is today more feasible than ever before."

But domestic critics – principally those same local businesses – claim they were never consulted over a decision they say is more motivated by Chavez’s political agenda than by economics.

Venezuela is only really competitive in the area of oil, an export commodity that does not require trade agreements. "The government has taken this decision guided by geopolitical criteria rather than by economic motives," said José Luis Betancourt, head of Fedecamaras, the national business federation.

While Argentina and Brazil have officially embraced Venezuela’s entry, business groups in those countries have warned that Chavez will use the trade bloc not only to propagate policies opposed to free trade but also as a platform to rail against the US.

That, they say, could undermine already weak cohesion within Mercosur. Paraguay and Uruguay are becoming averse to maintaining a pact distorted by their two larger neighbors’ protectionism.

Mr Chavez signed a "strategic alliance" with Néstor Kirchner, Argentine president, earlier in the day and offered diplomatic support for Argentina’s bid to reopen talks over the sovereignty of the Falkland Islands.

Mercopress – www.mercopress.com

Tags:

Ads

You May Also Like

UN in Brazil Announces Food Prices Are Starting to Fall Worldwide

United Nations Food and Agriculture Organization's (FAO) projections point to a gradual reduction in ...

Brazil Loses 6% of Its Foreign Tourists But Makes It Up in Revenue

Foreign visitors to Brazil last year left an estimated US$ 4.3 billion, up 11.77% ...

A Dream Bordello

"You know what the people need most? A whorehouse! I am going to retire ...

Ex-Treasury Secretary in Brazil Punches and Kicks Journalist after Incriminating Report

The Brazilian Association of Investigative Journalism has informed that on October 21, 2009, Brazilian ...

Brazil’s Mining Company Samarco Makes Over US$ 1 Billion Exporting All Its Production

As well as the appreciation in prices of their products abroad, the Brazilian mining ...

Work Starts in Peru at Highway that Will Open the Pacific to Brazil

The Interoceanic Highway (Rodovia Interoceânica), which will run through the state of Acre and ...

Favela Residents in Brazil Get Deed to Their Shacks

Brazilian officials said yesterday, September 25, they will begin mapping two labyrinthine Rio shantytowns, ...

Death Toll Rises to 57 in Brazilian Floods. Dozens Still Missing

The toll of deaths due to flooding in Brazil’s Northeast region states of Alagoas ...

Part of fallen Gol's Boeing 737 fuselage in Brazil's Amazon forest

Prosecutor Charges Brazilian as Main Culprit of Brazil’s Worst Air Accident

Brazilian federal prosecutor Tiago Lemos de Andrade thinks he knows who are responsible for  ...

Brazil Starts Emergency Program to Save Indian Kids

The United Nations Children’s Fund (Unicef) wants to provide indigenous tribes, in the South ...