Chavez: Joining Trade Bloc A Boon for Venezuela

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By FABIOLA SANCHEZ, Associated Press

CARACAS, Venezuela (AP) — Joining the South American trade bloc Mercosur will be a boon for Venezuela and should help the country's businesses boost international sales, President Hugo Chavez said Monday as he left for a meeting in Brazil where Venezuela will formally become a member.

Chavez urged Venezuelan business leaders, some of whom are concerned about reducing tariffs, to support the initiative as he departed for the meeting in Brasilia.

He said joining Mercosur will allow Venezuela "to have a much wider market to climb the scale" in its exports and also diversify its largely oil-driven economy. At the same time, Chavez said the bloc's other members, including Brazil, Argentina, Uruguay and Paraguay, will also have expanded access to Venezuela's vast oil reserves.

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Some business leaders and farmers say they're worried that the four-year period during which Venezuela should eliminate tariffs on products from Mercosur members will be too short, and that cheaper imports from countries such as Brazil and Argentina could hurt Venezuelan businesses.

Coffee grower Vicente Perez said he and other Venezuelan farmers are already struggling due to price controls and 21 percent inflation, and is concerned that joining the trade bloc will bring more economic pain.

"Now we just survive, and when Mercosur arrives I don't know what will happen," said Perez, who said price controls and other problems have forced him to leave his farm in central Portuguesa state in the hands of workers while he moved to the city to look for other work.

Perez, who is also a leader of the country's main farmers' association, said he's worried that cheaper imports of products such as beef, soy beans and coffee from countries such as Brazil will drive Venezuelan producers out of the market and lead to declining agricultural production.

Food imports have swiftly risen in Venezuela during the past seven years as the government has sought to meet rising demand, counter inflation and compensate for declining domestic production of various food products. Periodic shortages of items such as sugar, coffee and cooking oil have emptied shelves at times in recent years.

Increased food imports from other South American countries such as Brazil and Argentina have also supplied a network of state-run grocery stores that Chavez's government has opened to bring low-priced products to poor neighborhoods where many of the president's supporters live.

Venezuela's growing commercial ties with Mercosur members could also help Chavez raise his international profile as he seeks re-election in an October vote.

Venezuela's efforts to become a full member of Mercosur have been in the works for nearly six years but until recently were held up by resistance from lawmakers in Paraguay. Last month, when Paraguay was temporarily suspended from Mercosur in response to the congressional ouster of its president, the leaders of Brazil, Argentina and Uruguay seized the opportunity and welcomed Chavez's government as a member.

Paraguay's new president, Federico Franco, whose government is at odds with Venezuela, cited political motivations. "Venezuela has its elections Oct. 7. For that reason, Mercosur is trying to give a boost to President Chavez," Franco said Monday, according to Paraguay's state news agency.

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For Chavez, the visit to Brazil for Tuesday's meeting was the first international trip he has made as president in months following an operation in Cuba in February that removed a tumor. Chavez said earlier this month that he is now cancer-free.

Last week, Chavez dismissed criticisms of Venezuela's entry into Mercosur, saying it wouldn't be anything like the U.S.-supported free trade deals that he has vocally opposed. He called the Mercosur trade regimen "flexible" and said it accepts differences between members.

In contrast with the U.S., Chavez said, "Brazil isn't an empire. Brazil is a brother... as is Argentina, and also Uruguay and Paraguay."