Stuart Munckton
The 30th Common Market of the South (Mercosur) summit was held on July 20-21 in Cordoba, Argentina, and was the first presidential summit since Mercosur accepted Venezuela as a full member on July 4. Mercosur also includes Brazil, Argentina, Uruguay and Paraguay, as well as associate members Bolivia and Chile.
Venezuela's membership significantly increases the trading bloc's economic clout, and potentially further undermines the economic stranglehold of the United States over the continent. Venezuelan President Hugo Chavez has pushed for much greater economic and political unity of Latin American countries to challenge US domination, and Venezuela led — with the support of Mercosur members — the successful opposition at the Summit of the Americas meeting last November to US plans to impose a Free Trade Area of the Americas (FTAA). With Venezuela's entry, Mercosur encompasses 75% of South America's GDP. At the summit, Chavez called for Bolivia and Cuba to also be included as full members.
Particularly significant was the presence at the summit of Cuban President Fidel Castro. For the first time, Mercosur signed an economic agreement with socialist Cuba. The Complementary Economic Agreement sets the objective of "driving the trade exchange of the parties through the reduction or elimination of taxes and other applied restrictions regarding the importation of negotiated products", according to a July 25 Venezuleanalysis.com report.
This is an important step towards breaking out of Cuba's economic isolation caused by the US economic blockade of the island. The willingness of Mercosur nations to defy the US by signing such an agreement, and allowing Venezuela — the target of increasing US hostility — to become a full member is a sign of the increasing isolation of the US in the region and the willingness of a number of Latin American nations to challenge its interests.
However, the nature of Mercosur is not the same as the alternative to US-enforced neoliberal policies that Venezuela champions — the Bolivarian Alternative of the Americas (ALBA). ALBA bases itself on explicitly pro-people, anti-capitalist policies of genuine cooperation and solidarity between peoples. Venezuela, Cuba and Bolivia have signed three-way agreements based on these principles.
Mercosur, on the other hand, has always remained firmly within a capitalist framework. A June 22 Venezuelanalysis.com comment piece by Steve Mather points out that Mercosur was established in 1991 as a pro-neoliberal trading bloc in order to better position its member countries to negotiate terms within the expected US-enforced FTAA. Mercosur has represented the interests of the capitalist class of its member nations — especially Brazil — rather than working people and the poor.
While seizing the opportunity to strengthen Mercosur as a bloc to counter US domination and attempt to advance Latin American economic integration, Chavez has repeatedly insisted that the nature of Mercosur needs to be changed to serve social interests. Mather quotes Chavez in December: "We need a Mercosur that prioritises social concerns, we need a Mercosur that every day moves farther way from the old elitist corporate models of integration that look for ... financial profits, but forget about workers, children, life, and human dignity."