Latin America

The Mercosur Meeting

Venezuelan President Hugo Chavez talks to the press

Venezuelan President Hugo Chavez talks to the press June 21 in Asuncion, Paraguay, before returning to his country. (Photo: Norberto Duarte / AFP-Getty Images)

A meeting of Mercosur was held in Asuncion, Paraguay June 18-19. Argentina, Brazil, Paraguay and Uruguay formed Mercosur in 1991 with the aim of creating a South American common market. [They were later joined by associate members Chile (1996), Bolivia (1997), Peru (2001) and Venezuela (2004). Mexico was granted observer status in 2004.] The meeting approved an accord on defending human rights and launched a $100 million regional cooperation fund to help fight poverty. It has also studied a Peruvian plan to set up a ring of natural gas pipelines and power supplies to help ease energy shortages.

Brazil’s President Luiz Inacio Lula da Silva and Argentina’s Kirchner have, since taking office in 2003, sought to place more emphasis on using Mercosur to boost political cooperation in South America. Argentina is a full member, but President Nestor Kirchner was only in Asuncion for a few hours on Sunday (June 19).

Paraguay’s President Nicanor Duarte highlighted the problems advancing the bloc’s aims as he gave the opening speech at the summit. He told other leaders that the Treaty of Asuncion which created Mercosur has “sadly not been fulfilled.” On June 18, Paraguay’s Vice President Luis Castiglioni accused the bigger members — Brazil and Argentina — of dragging their feet over cooperation and said Paraguay may have to seek an alternative path to regional integration “if Mercosur doesn’t find solutions.”

The plan to set up a special cooperation fund to fight poverty was agreed at a dinner of the Argentine, Brazilian, Paraguayan and Uruguayan presidents on Sunday night. The leaders said in a statement that the new fund will help “the construction of a more equitable and just society,” necessary for “the consolidation of the democracy in the Mercosur” region. Brazil and Argentina will provide most of the initial money while Paraguay and Uruguay, along with poorer regions of the two bigger members, will receive most of the fund.

Venezuela expected to sign key documents during the summit to allow it to become a full member, but it didn’t happen. Former Argentine president Eduardo Duhalde, who now heads Mercosur’s permanent commission, said the time was not yet “ripe” for either Venezuela or Chile to become full members.

Uruguayan President Tabare Vazquez, who took over the rotating presidency of the union for the next six months, warned that trade disputes, economic crises and deep poverty in the region have left Mercosur in a lull in recent years. “I take charge of a Mercosur in crisis but with great prospects for growth,” said Vazquez, vowing to bring the economic policies of the Mercosur nations into closer harmony. Leaders also discussed the possibility of an eventual Mercosur parliament and the seats representing each country. A deadline has been set for 2006 to create such a parliament. Meanwhile, Brazilian President Luiz Inacio Lula da Silva exhorted Mercosur nations to extend trade agreements as far afield as Canada, Egypt and Morocco — as well as hasten a long-sought accord with the European Union.

Chilean President Ricardo Lagos noted that countries in the region have yet to advance fully on integrating economic policies, while Venezuelan President Hugo Chavez used the occasion to urge members to pull back from United States-style free market policies. “Neoliberalism is the highway to hell,” said Chavez in a fiery discourse even as others such as President Alvaro Uribe of Colombia exhorted the Mercosur nations to seek commercial agreements throughout Europe and Africa.

Among steps, the Mercosur countries agreed to create a $100 million fund to shore up the smallest Mercosur economies, Paraguay and Uruguay. The funds are to be earmarked for job creation and education programs as well as infrastructure programs in both countries.

During the 38th Southern Common Market (Mercosur) summit, Chavez assured that Latin American integration wouldn’t be achieved through either trade or competition among private sectors of Mercosur member countries. He spoke three times in two days: At the Mercosur meeting, in the Paraguayan parliament, and at the University — repeating more or less the same ideas.

“It’s not through trade that we will achieve integration; it’s not through competition among our private sectors that we will attain integration; it’s the other way round.” According to him, it’s vital to tread the path of economic “complementation” by embracing sub-continental planning. In this regard, he called for his Latin American counterparts to pave the way for the 21st century socialism, thus rejecting capitalism and neoliberalism propagated “by Washington.”

In the speech to the Paraguayan parliament Chavez proposed the creation of regional companies, with state contribution, to obtain the financial independence of the great corporations, mainly American. “We come to contribute to the revolutionary ideas, to overcome imperialism, or other forms of domination.” He repeated that “Neoliberalism is the way of hell. Whoever wants to go to that hell, let him listen to Washington … The capitalist system is incompatible with democracy”, added Chavez, who declared himself a Christian, but of the Theology of Liberation (he consistently refuses to admit that he is a Marxist, although his ideas and vocabulary are increasingly Marxist). He also commented on the state of regional integration and assured that it won’t be accomplished successfully solely by commercial agreements. “Relying on the market economy we aren’t going to be able to achieve integration. It is a conceptual error, a primary error.”

“The issue is clear, either we integrate or we perish. It’s a question of life and death, but I don’t speak about an economic integration, because that is based on the mere competition. Here it’s necessary to put the social side ahead of the political side … I want to speak clearly that if the Mercosur doesn’t transcend mercantile vision with which it was born there will be no possible integration,” affirmed Chavez. Colorado party senator Amado Yambay interrupted the speech, when Chavez bitterly criticized the rich, and exhorted the audience not to take his words seriously. Yambay, seated in the first row, addressing Chavez said that not all rich people are bad and that the proof of that was his colleague Blas Riquelme, who was sitting a few rows behind, that there are industrialists who employ many people. The senator’s intervention surprised Chavez, who then managed to say that if one is rich he has at least to share his wealth with the others.

Talking to the students of the Faculty of Philosophy of the National University of Paraguay, Chavez asserted that only the young people have the purity to make revolution. “We are in the era of attacks, of advance, of moral, social, cultural and economic offensive. A new hour has arrived … We must construct the world leading toward the socialism … human capitalism doesn’t exist”.

How successful was the meeting for Chavez? Not really. Venezuela didn’t become a full Mercosur member. The meeting between the president of Ecuador, Alfredo Palacio, and Chavez didn’t take place, which angered Chavez. There’s diplomatic tension between the two governments, due to the declaration of Luis Herreria, a senior government official, who described as “horrible and diabolic” the Bolivarian project. This was severely criticized by Chavez as something being said by “the servants of the U.S. imperialism,” the phrase used by the Soviet propaganda machine, some years ago.

After speaking for hours against capitalism and praising socialism, Mercosur states were totally convinced that all the dealings with American imperialism have to cease. Wrong. Uruguay’s industry minister Jorge Lepra is traveling, along with representatives of other Mercosur members, to Washington to discuss the financing of the planned South American gas ring with the Inter-American Development Bank. The Mercosur trade bloc decided yesterday to formally launch the gas ring project, which would link gas fields in Camisea, Peru, to the Chilean city of Tocopilla, and would be connected to existing pipelines that supply gas to Argentina, Brazil and Uruguay. The new pipeline would be 1,200 kilometers long and the cost of the whole project is estimated at $2.5 billion. The Bolivian political crisis prompted Mercosur members to look into ways of reducing their dependence on Bolivian gas. I wonder what Chavez has to say about this?