MercoPress. South Atlantic News Agency

Chavez proposes a “new equals configuration” for Mercosur

Venezuelan president Hugo Chavez is sponsoring a “new configuration” for Mercosur to help overcome the current asymmetries among members which are threatening the cohesion of the block.

"President Chavez made the informal proposal to President Lula da Silva" during his brief visit to Brazil on Thursday when the two leaders shared a late meal, revealed Venezuela's Communications minister William Lara.

Venezuela is in the process of becoming a full member of Mercosur, a block which is currently under strong strain because the two smaller members Paraguay and Uruguay are disenchanted with the way Brazil and Argentina are handling affairs, and they are looking for other trade and investment options.

"Venezuela would like to see an equals relation inside Mercosur", advanced Mr. Lara adding that Chavez is proposing a "new integration configuration based in trade complementation and solidarity so as to help overcome the current asymmetries in the integration process".

Chavez initiative will be officially considered next Wednesday during a regional presidential summit in Sao Paulo with the participation of leaders from Venezuela, Argentina and Brazil.

"If this finally takes on it will not only mean the re-launching of Mercosur but also its consolidation and will help as the foundation for the Americas Bolivarian Alternative or ALBA (dawn in Spanish)", an initiative cherished by President Chavez as an option to the United States sponsored Free Trade Association of the Americas.

Last Wednesday Chavez announced Venezuela was abandoning the Andean Community of Nations, CAN, in disagreement with Colombia and Peru's decision to negotiate and sign bilateral free trade agreements with United States.

"CAN is dead, our option is a new Mercosur", highlighted Mr. Lara quoting on President Chavez's new regional foreign policy focus.

President Chavez announcement actually sent shockwaves to political and business sectors in Peru, Colombia and Venezuela, which together with Bolivia and Ecuador belong to the block created in 1969.

From Peru, President Alejandro Toledo called on Mr. Chavez "to reconsider his words?I humbly ask him to reconsider the situation". However the greatest reaction came from Colombia's private sector. Colombian Industry Confederation president Luis Carlos Villegas said he hoped President Chavez words "are a political statement and not reality".

Colombian president Alvaro Uribe said the issue must be addressed "with extreme calm".

Similarly in Venezuela where the Industry Confederation also expressed concern and cautioned that such a move would have negative consequences for the Venezuelan economy "with a fall in activity and loss of jobs".

Only Bolivian president Evo Morales seemed to agree with Chavez, "I feel CAN is dead", he pointed out.

Trade among CAN countries reached 9 billion US dollars in 2005.