Venezuela clashes with Mercosur doctrine

If Venezuela is to enter Mercosur as full member next July 31 once and for all, it will have to do it under a free-market policy instead of controlled economy, such as the policy bolstered by Venezuelan President Hugo Chávez.

In line with the Treaty of Asunción, that is, the Treaty Establishing a Common Market between the Argentine Republic, the Federal Republic of Brazil, the Republic of Paraguay and the Eastern Republic of Uruguay, Member States are bound to "the free movement of goods, services and factors of production between countries through, inter alia, the elimination of customs duties and non-tariff restrictions on the movement of goods, and any other equivalent measures."

This statement has consequences for Venezuela. The government of President Hugo Chávez views exchange control as pivotal in its economic policy. However, such move is a non-tariff restriction on free trade, as it hinders access to foreign currency and imports.

A sample of the implications of such barriers is the existent struggle between Brazil and Argentina, following the decision of the government of Argentine President Cristina Fernández to expand the number of goods requiring non-automatic import licenses. The measure endangers the inflow of Brazilian goods.

"There is a general problem. Mercosur bets on free market and free enterprise, whereas Venezuelan economy is based on controls," Internationalist Carlos Romero infers.

Consider, though, that Venezuela presently faces too many troubles to increase its exports. Therefore, for the rest of Mercosur Member States, waiving details such as those contemplated in the Charter is attractive, thus warranting, at least in the medium term, more sales to Venezuela.

Remember that in the aftermath of a falling domestic production, Venezuela has resorted to imports to enlarge supply and curb inflation.

"Pragmatic talks will be held; certainly this will happen," Romero affirms.