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Venezuela joins Mercosur free trade zone


Venezuela joins Mercosur free trade zone


Venezuela has formally become the fifth full member of South America’s biggest trade bloc Mercosur with the country’s President Hugo Chavez flying to Argentina for the group’s trade summit. There he praised his ally Cuba’s Fidel Castro who is at the meeting to sign a trade agreement with Mercosur reducing and eliminating tariffs on exports to the communist-ruled island nation.

Chavez said: “Cuba being here means we have the presence of a fellow historical country, a country that has a lot to give in the social, geopolitical and economic areas.”

Castro’s presence has increased speculation that Mercosur could be pushed further to the left.

But moderates like the leaders of Chile, Uruguay and Brazil may resist. They will want to concentrate on finding common economic ground rather than baiting the US. Analysts say many Mercosur countries compete rather than complement one another, particularly on commodities.

The group consists of Argentina, Brazil, Paraguay, Uruguay and Venezuela with associate members
Ecuador, Chile, Bolivia, Peru and Colombia now has a total population of 252 million. Combined the country’s GDP is 645 billion euros and trade with the EU was worth 35 billion euros last year. Mercosur is a free trade zone, which is commonly known as the Southern Common Market but there are heated disputes among some member countries.

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