One More Try at Mercosur

One More Try at Mercosur
Rio de Janeiro summit ends in more of the same

Alan Mota (al0021)

Published 2007-01-23 15:04 (KST)

The 32nd Mercosur summit, which took place on Jan. 18 and 19 in Rio de Janeiro, Brazil, can be considered a success, but not necessarily on its own merits. The multilateral community, formed in 1991 with intentions of becoming the European Union of the Americas, became more important than the Andean community, created decades earlier, and survived the advent -- or threat, according to some -- of the ALCA (Free Trade Area of the Americas), but that wasn't enough for Mercosur to overcome its own serious existential crisis.

ALCA itself hit the bloc hardest in terms of credibility, with Chile signing a bilateral agreement with the U.S. as a response to ALCA's failure, and Argentina and Uruguay, two permanent members of the bloc, discussing their own agreement. Meanwhile Brazil, the natural leader of the group, was fighting with its own external policy, juggling to please the new South American left while assuring the capitalists of the world, supportive of the responsible neo-liberalism shown in Chile, that the community wasn't and still isn't going to become a stage for socialist experiments.

For these and other reasons, the fact that the summit simply happened without heated arguments or other embarrassments is already an achievement. Still, words spoke louder than actions in the summit, among the highlights of which was a vague proposal for the creation of a unified financial system, considered to be a long term goal for Brazil, Venezuela, and Argentina.

Going way further and making much more noise was the proposal for a "South Bank" that would, according to its proposer, Hugo Chavez, save the Mercosur countries from "begging around the world" for money. Another proposal was the creation of the "great gas pipeline of the South," a US$23 billion joint construction of Brazil and Venezuela for which both countries signed several contracts -- field work is scheduled to begin this year. There was also a proposal for an agreement with the Gulf Cooperation Council, formed by Saudi Arabia, Kuwait, Bahrain, Qatar, Oman, and the UAE, meant to facilitate free trade among the two blocs in the future, and for an agreement among the Mercosur countries to substitute the dollar for local currencies in intra-bloc transactions.

On the other hand, the brawls that have been undermining the bloc's political strength don't seem to have cooled down. In the opening speech of the summit, Luis Inacio "Lula" da Silva, the president of Brazil, gave several messages to Argentina and Uruguay, the latest "problems" of the bloc. To Argentina and its reluctance to open itself to the bloc, Lula called for a "ceding of personal interests" in the name of integration. For Uruguay and its talks with the U.S., Lula underlined the long- term importance of a regional agreement.

Rafael Correa, the president of Ecuador, declared that his country does not plan to join the Mercosur as a full-time member, but plans to strengthen its relationships with the bloc through the Andean Community of Nations, the same group rejected by Chavez, a future member of Mercosur. Other vital -- and controversial -- issues for the community, such as the import of raw materials from non-participants of the bloc and the double charging of the TEC (Common External Tariff) for external (non-participants) imports, were left for the next summit. The only area where there was a concrete outcome was the creation of the FOCEN (Structural Convergence Fund), a $100 million fund to finance infrastructure projects in the poorer members of Mercosur.

In a cold meeting like this, once again Hugo Chavez was the man responsible for heating it up. The probable cause of the president of Peru, Alan Garcia's, absence, Chavez managed to make a stage out of the summit, despite the efforts from the other participants, attracting the eyes of photographers, journalists, and even passersby who simply wanted to see the man who is becoming some sort of myth. In crowded interviews, he said he was "decontaminating" the Mercosur from neoliberalism and that he would put all his effort in strengthening the bloc, saying that it is a geopolitical issue more than an ideological one. Every journalist in the summit was eager to hear about his promise of installing 21st century socialism in Venezuela after being re-elected, and he didn't save time or words in talking to them.

Between Chavez's performance and the outside agreements being formed by the U.S., the Mercosur seems to be losing political weight -- and respect, which is even worse -- in the international community. This is an issue that can't be left for the next summit, and can't be solved with vague agreements and emotional speeches.
©2007 OhmyNews

Other articles by reporter Alan Mota