Well, that didn’t take long: in the wake of Fernando Lugo’s quickie impeachment, Mercosur has suspended Paraguay’s membership in the trade block…which, magically, removed the one big obstacle remaining to Venezuela’s accession, allowing Venezuela to become a full member.
Politically, it’s a rich prize: signing onto a customs union with Chávez’s Southern Cone ideological fellow-travellers is a longstanding strategic aspiration for the Bolivarian regime.
But Mercosur is supposed to be, first and foremost, a trade agreement, so…what does it mean for Venezuela’s economy?
Well, it’s a funny thing. Normally, countries try to negotiate free trade agreements for one reason: to get better access to foreign markets for their exporters. But Venezuela’s a mono-exporter of a product that doesn’t face any trade barriers anywhere, because everybody’s desperate for it.
In the meantime, our non-oil export sector has been utterly defeated by the insane mountain of paperwork aspiring exporters face, and finished off by a crazy Currency Control regime that more or less guarantees exporters lose money. Under those circumstances, tariffs levels in Argentina and Brazil are number 7,398,328 or so on the list of practical problems keeping Venezuelan firms from selling stuff abroad. Still, it’s nice to know that’s been taken care of…