MercoPress. South Atlantic News Agency

Brazil confident Venezuela joins Mercosur next September

Top salesman Lula da Silva: contracts in Venezuela for Brazilian corporations

Brazil Lula da Silva said on Tuesday his peer Hugo Chavez is expecting the Brazilian Senate to approve Venezuela’s incorporation to Mercosur before next September.

“For ten years Chavez has been waiting incorporation to Mercosur. It has been approved by the Lower House and we are waiting for a meeting of the Senate’s full house so they can vote the incorporation”, said Lula da Silva who on Tuesday hosted Chavez in Bahia.

Lula da Silva said that the main obstacle was that Venezuela did not adhere on time to the tariff reduction schedule for goods traded between Mercosur members. However Venezuela has now agreed to a schedule, announced both presidents.

Therefore “we expect to have Venezuela’s incorporation approval for our next meeting in September in Caracas”, said Lula da Silva.

The two presidents have established a regular round of quarterly meetings to address bilateral issues and regional integration. The Bahia meeting was the sixth.

Other issues addressed at the meeting included the joint building of a huge refinery, with talks having begun in 2005. However Brazil has started the construction and following the meeting said the issue will be addressed again in 90 days.

The original plan which involved Petrobras and Venezuela’s PDVSA was for a 60/40 share with the same ratio for the 4.5 billion US dollars to be invested. One of the stumbling blocks is if PDVSA will have access to the retail fuel market in Brazil.

The coming July meeting of the Union of South American Nations, Unasur, in Chile was also addressed. The rotating presidency is scheduled to be handed to Ecuador by Chile but the standing chairman post, for which former Argentine president Nestor Kirchner had been proposed, has been repeatedly vetoed by Uruguay given the bilateral trade and financial disputes.

Finally Chavez returns to Caracas with a 4 billion US dollars loan for infrastructure investments to be instrumented by Brazilian corporations.

“Brazilian companies should be certain that in Venezuela they will have all of our support” said Chavez who added “We are so happy, Lula, we are so grateful“.

The agreement signed by Brazil's state development bank BNDES paves the way to finance Venezuelan infrastructure projects carried out by Brazilian companies seeking a foothold in Venezuela. Brazil's Industrial Development Agency said it had provided a list of 26 companies that are interested in developing industrial projects in Venezuela.

”The proposed projects so far total 4.3 billion” said Luiz Antonio Dantas, the BNDES's superintendent for international affairs. Venezuela has 45 days to choose and detail the projects.

Chavez said the loans would finance a range of projects such as new infrastructure, petrochemicals production and electricity generation, which involve Brazilian companies.

The funds could ensure Venezuela has enough cash on hand to pay companies such as Odebrecht, a construction giant helping expand the subway of the Venezuelan capital or petrochemicals giant Braskem, which is helping build plants in Venezuela.

BNDES president Luciano Coutinho last week was in Caracas and met with Chavez to arrange details of the agreement signed Tuesday in Bahia.