Twist to Latin America’s trade block squabble
Latin America’s Mercosur trade bloc is facing renewed in-fighting.
Plans to expand and consolidate the initiative have already been overshadowed by last year’s controversial inclusion of Venezuela into the trade agreement as a full member and the suspension of founding member Paraguay.
In the latest twist to the internal wrangling, Venezuela has further taken on board Mercosur aims towards multilateral collaboration, but openly excluded Paraguay from the latest set of regional agreements. As well as Caracas, these incorporate founding members Argentina, Brazil and Uruguay.
Paraguay’s exclusion
The discord within Mercosur has diluted the organisation’s former strength and has meant that long-awaited agreements with the EU are far from being completed. This is because fighting over Paraguay’s exclusion has taken up the majority of the pact’s conference time.
Paraguay was ousted from Mercosur following the impeachment of former president Fernando Lugo by the country’s senate. Vice President Federico Franco was installed in his place.
Mercosur reasoned that the changes constituted a coup and campaigned to deny Franco diplomatic recognition within Latin America. However, the Organisation of American States refused to throw Paraguay out and the nation also garnered EU support for its aim to hold democratic elections.
Effect of exclusion
The moves by Mercosur to undermine Franco have been of little impact outside of the trade pact, but within it Paraguay has been stripped of the majority of its privileges as a founding member
Online news service Terra Daily said:
The diplomatic isolation has had the effect of closing most avenues of collaboration between Paraguay and its Mercosur members but hasn’t prevented Paraguay from seeking trade partners elsewhere.
Despite evidence that the campaign against Paraguay is counterproductive, Mercosur plods on regardless, refusing to mend fences with Franco’s administration.
In the latest exchanges, Venezuela announced its association accords will regularise the oil-rich country’s trade with Argentina, Brazil and Uruguay. Venezuela’s pronouncements made no mention of Paraguay.
“This is an event of great significance since these instruments contain the trade liberation programs and their evolution with partners Brazil, Argentina and Uruguay,” the Venezuelan statement said.
Deepening divisions
It is thought that the latest agreements will deepen divisions within Mercosur, but that the trade liberalisation will benefit other trade partners Argentina, Brazil and Uruguay.
Terra Daily said:
The Paraguayan row runs counter to the spirit of Mercosur’s regional trade programmess and also belies Mercosur’s charter provision that all decisions must be unanimous. So far Mercosur has swept aside the objections, saying political expediencies take precedence over constitutional provisions.
Analysts say that by bending rules to accommodate Venezuela, Argentina, Brazil and Uruguay have set in store deeper problems within the organisation in the coming months.
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