Venezuela accession to Mercosur “by the back door”, according to The Economist
Under the heading of “In by the back door” referred to the expansion of Mercosur, The Economist says “bringing Venezuela certainly was smart, in the sense of cunning rather than wise”, but it was done ignoring the block’s rules which call for unanimity in admitting new members.
Who are the winners? According to The Economist, presumably Brazil and Argentina which hope to increase their exports to Venezuela. After years of currency appreciation and rampant cost increases unmatched by improvements in productivity, manufacturers in both countries find it hard to compete in world markets. Venezuela is one of the few.
Follows the full article:
On July 31st Hugo Chávez, Venezuela’s president, made his first foreign trip since his cancer treatment in Cuba last year. He joined Cristina Fernández, Dilma Rousseff and José Mujica, the presidents of Argentina, Brazil and Uruguay, in Brasília to celebrate his country’s formal accession to Mercosur, a regional trade block. Mugging with model planes for the cameras, Mr Chávez also signed off on the purchase by Conviasa, Venezuela’s state-owned national airline, of six planes from Brazil’s Embraer. With Venezuela inside, Mercosur would be a “new pole of world power,” said Ms Fernández. “Those who do not grow, perish,” said Mr Mujica. “We have to look for smart ways to bring in new members.”
Bringing Venezuela certainly was smart—in the sense of cunning rather than wise. Venezuela was first invited to join in 2006, but its admission was blocked because the Senate of the fourth member, Paraguay, refused to ratify it. When Mercosur other three members decided last month to suspend Paraguay for a year in response to the lightning impeachment and removal of its president in June, that provided an opportunity to ignore the block’s rules, which call for unanimity in admitting new members.
Asked by a Brazilian newspaper, Estado de São Paulo, if Venezuela had taken advantage of a loophole to get in, Mr Chavez replied with a football metaphor. “Suppose that in a football match, Pelé gets a red card for a foul. And then Brazil can’t score the goals it needs to win. And someone says: ‘But Pelé wasn’t playing.’ Well, Pelé was suspended. Paraguay is suspended and it’s not currently part of Mercosur.”
For Mr Chávez, his country’s admission to Mercosur is a seal of approval from some of the few foreigners whose opinions interest him. The ceremony also offered a chance to display his physical fitness ahead of Venezuela’s presidential election in October: he insisted on walking up the ramp to the Planalto, though that broke protocol and caused delay as the ceremony was re-choreographed. Brazil and Argentina presumably hope to increase their exports to Venezuela. After years of currency appreciation and rampant cost increases unmatched by improvements in productivity, manufacturers in both countries find it hard to compete in world markets. Venezuela is one of the few.