WESTERN HEMISPHERE: MERCOSUL SUMMIT IN RIO DE JANEIRO;

UNCLAS SAO PAULO 000045 SIPDIS SIPDIS STATE INR/R/MR; IIP/R/MR; WHA/PD DEPT PASS USTR USDOC 4322/MAC/OLAC/JAFEE E.O. 12958: N/A TAGS: KMDR OPRC OIIP ETRD BR SUBJECT: WESTERN HEMISPHERE: MERCOSUL SUMMIT IN RIO DE JANEIRO; CHAVEZ'S REGIONAL AND INTERNATIONAL INFLUENCE; SAO PAULO ¶1. "Lost Mercosul" Center-right national circulation daily O Estado de S. Paulo (1/19) maintained: "In 2006, Brazil, Argentina, Uruguay and Paraguay imprudently accepted Colonel Hugo Chvez's Venezuela as a member of Mercosul.... With five partners, Mercosul is weaker than it was with four. With six [if Bolivia is admitted in the bloc] the bloc will be even more fragile or more disjointed.... Speaking about strengthening the bloc nears insanity: with partners like Chvez's Venezuela and Morales' Bolivia, Mercosul only becomes weaker and more distant from its original goal. Among its members, only Paraguay and Uruguay seem to have realistically evaluated the opportunities lost over the recent years.... Hugo Chvez's Venezuela does not add anything but problems to Mercosul. The caudillo has already shown his opposition to the liberation of agricultural trade in the Doha Round as supported in rare unanimity by the other Mercosul partners. The entry of EVO Morales' Bolivia in the bloc will make even more difficult a consensus on international matters of concrete interest for Brazil, Argentina, Paraguay and Uruguay." ¶2. "Bloc Of "Blah Blah Blah"" Liberal, largest national circulation daily Folha de S. Paulo editorialized (1/19): "There is in South America an exhausting repetition of boring summit meetings in which leaders swear reciprocal friendship and discourse on the virtues of cooperation. Despite this friendly climate, governments foster irreconcilable policies, interregional institutions do not work and economic interactions become damaged.... What kind of advantage does the presence of a Chavist Venezuela bring to Mercosul?.... It is obvious that private companies will hesitate to invest in the region when Bolivia and Venezuela nationalize entire sectors of the economy.... Chvez harasses the oppositionist media and will now rule by decree.... Mercosul's most profound fissure, however, is in the bloc's core.... This would be the moment to abandon the customs union chimerical project - through which Brazil, Argentina, Uruguay and Paraguay would work as a single nation in trade relations with other blocs or nations. It would be more feasible to work as free trade association (zero tariff among partners) with respected institutions to solve conflicts." ¶3. "Chvez And Brazil" Former Foreign Minister Luiz Felipe Lampreia commented in center-right O Estado de S. Paulo (1/19): "Brazil has a clear South American agenda based on energetic integration, expansion of our companies' competitiveness and an increase of trade. Obviously, Venezuela is a priority in such an agenda and therefore it is in Brazil's interest to maintain good relations with that nation, an excellent partner in the three mentioned levels. What is not right or advisable is to allow Chvez to dictate the course of such relations.... There are enormous differences of commitment and conviction between Chvez and Lula. Much more than an ally and partner, Chvez is Lula's rival who sees in the Brazilian president a former leftist who 'accommodated to bourgeois interests' and became pragmatic, the only one able to dim his Latin American popularity and who represents, contrary to Venezuela, a reliable interlocutor of the great powers in the world." ¶4. "Lula Running Behind Chvez" Liberal Folha de S. Paulo's political columnist Eliane Cantanhede opined (1/19): "President Lula, Foreign Minister Celso Amorim, Workers Party members in the government and diplomats in general do not admit that there is a competition between Brazil and Venezuela, i.e., between Lula and Chvez, for South American leadership. But it is clear that it exists. It is a competition that can be seen in Chvez's personality and petrodollars.... Disputes between Brazil and Argentina are today part of history.... The dispute of power today is concentrated in Venezuela. The Mercosul Summit is a kind of marketplace where smaller partners (Paraguay, Uruguay and probably Bolivia) offer their conditions, Brazil and Argentina discuss whether they buy or not and Chvez has fun. Because he advances, while Lula runs behind, even in their speeches." McMullen