Differences within Mercosur are an inevitable result of deepening relations among its five members, said Brazil's Foreign Affairs minister Celso Amorim interviewed by the Financial Times but admits there might be casualties among junior members dissatisfied with the functioning of the trade block launched in 1991.
Uruguay and Paraguay have become increasingly unhappy about the limited commercial and other benefits they are drawing from their Mercosur membership and Uruguay has recently reached a framework trade and investment deal with the United States, that, if taken to its logical conclusion, "would make continued membership of Mercosur unviable", underlined Celso Amorim. "Brazil has tried to meet the complaints of the two smaller countries by lending to infrastructure projects", he said admitting that it may not satisfy the "dissidents". And Uruguay could ultimately go its own way. "It's their choice, of course. Every Brazilian would respect that decision", highlighted Mr. Amorim. But Brazil in recent months seems willing to tolerate other "backyard" challenges: to the west, Bolivia nationalized the assets of Petrobras, Brazil's giant oil company, and to the north Venezuela's belligerent President Hugo Chávez is threatening to convert Mercosur, a trade pact dominated by Brazil, into a platform for his effort to build 21st-century socialism. However the long serving diplomat who has been Foreign minister since President Lula da Silva took office four years ago says critics misunderstand the changing character of Mercosur and underestimate the need for broader integration in a world where resources and physical infrastructure are growing in importance. "If you look at Mercosur purely from a commercial angle, you won't understand it . . . The emphasis on resources and interconnectivity is much greater now." Brazil supported the speedy entry of Venezuela as a full member of Mercosur last year and tried to achieve the same this year for Bolivia but was blocked. Venezuela is the world's fifth largest producer of oil. Bolivia has the second largest reserves of natural gas in South America and already provides Brazil with more than half of its daily needs. Both border Brazil and Venezuela offers it access to the Caribbean. "Venezuela is important geopolitically not because we want political influence but because it is part of our trade routes," says Mr Amorim, who also stresses the way a new road link though Peru, another associate, has allowed Brazil access to ports on the Pacific coast for the first time. "The connection between the North Atlantic and the Pacific took place in the 19th century, we are 100 years behind. We have to catch up," he says. But Mr Amorim and Brazil's foreign policy establishment have been under regular fire from domestic rightwing critics for alleged complicity with the "authoritarianism" of radical leftwing governments in Venezuela and Bolivia, says the Financial Times. "It makes people who are less familiar with this corner of the world believe that Lulismo is part of Hugo Chávez's support network" said an editorial in O Estado de S. Paulo, one of Brazil's best-selling dailies. Brazil's refusal to condemn a decision last month by Mr Chávez to close an opposition television station has been particularly controversial. Those who detect a new alignment of ideas among the Brazilian, Venezuelan and Bolivian governments had their view reinforced last week by an agreement between Mr Lula da Silva and President Evo Morales of Bolivia to increase the price Brazil pays for Bolivian natural gas. Silas Rondeau, Brazil's Energy Minister described the deal as "geopolitical" rather than commercial; Mr Lula da Silva said it arose from Brazil's need to be "generous" towards its poorer neighbor. And while Brazil is sympathetic to the social goals of radicals such as Mr Chávez, it disagrees with the means and style of government. "It is certainly not our way. Our model is certainly to have checks and balances and a free press", insists Amorim. Rather than openly criticize, however, Mr Amorim signals that Brazil can be more effective by quietly persuading behind the scenes. It is an approach that he says has yielded fruit in Bolivia, where Mr Morales has backtracked from his original, more radical version of gas nationalization. Harsh public criticism of either government would not have been the Brazilian way, says Mr Amorim. "We reacted but we didn't over-react. We defended our interests in a pragmatic way. The principle is non-intervention but we follow the guidelines of non-indifference." All this is guided by a sense that US international leadership, uncontested when Mercosur was formed in 1991, is being challenged by the rise of blocs such as the European Union and China. "To face these real giants, South American integration is very important for Brazil" says Mr Amorim.