Brussels, 02/08/2012 (Agence Europe) - Supported by Brazil, and in the absence of Paraguay, Venezuela - the “champion” of non respect of investors' rights - has officially become part of Mercosur.
After six years of waiting, Venezuela celebrated at the Mercosur summit in Brasilia on 31 July its official entry into the South American common market, alongside Argentina, Brazil and Uruguay (Paraguay being suspended since the dismissal of its president, Fernando Lugo).
The Venezuelan president, Hugo Chavez, said he was “very interested” at the prospect of “leaving the oil model” which offers his country - the world's top oil reserve - this membership of the Latin-American bloc, set up in 1991. It is a membership that the Paraguayan Senate has been blocking since 2006. Chavez received messages of welcome from his colleagues Dilma Roussef from Brazil, Cristina Kirchner of Argentina and José Mujica of Uruguay. Roussef welcomed the fact that Mercosur has, with Venezuela's arrival, become the fifth economy in the world after the United States, China, Germany and Japan. The South-American customs union is based on “global energy and food power”, she said. Chavez, for his part, welcomed a new opportunity to develop agriculture, industry and tourism in his country.
Venezuela, whose economy is largely state-owned, will officially become a member of Mercosur on 12 August, and it will have to comply with the trade bloc's rules by 2016.
The membership of this country that is a champion in expropriating foreign investors - Caracas last week confirmed it had left ICSID, the arbitration body of the World Bank which found against 174 times out of 176 complaints lodged in cases of expropriation of local branches of international investors - will doubtless complicate a little the laborious free-trade negotiations between the EU and Mercosur that were started in 1997, then re-launched in 2009, and have been in stalemate ever since. In spite of its trade difference with Argentina, including the expropriation of the Spanish oil company Repsol and its complaint to the WTO against export restrictions, the EU ruled out at the end of May a halt in the negotiations with Mercosur.
No rejoining for Paraguay before elections. On Monday, Argentina, Brazil and Uruguay told Paraguay (which has been suspended since the controversial dismissal of President Lugo) that it would not be able to rejoin the bloc until after the presidential elections, which are scheduled to be held in April 2013. (EH/transl.fl)