Argentina and Venezuela agree on regional alliance and trade

Venezuela and Argentina signed Monday in Puerto Ordaz several bilateral accords which lock the two countries into a tight strategic alliance targeted at converting Mercosur into the clear alternative to any trade agreement involving the hemisphere.

Argentine president Nestor Kirchner hailed the occasion as “historic” and “unprecedented” and said the “bilateral relation has given a qualitative forward leap and I leave Venezuela absolutely gratified”.

The one day talks with President Hugo Chavez ended with the signing of agreements for the Venezuelan supply of five million barrels of heavy diesel fuel, further cooperation in the oil industry and other energy issues, plus the purchase of Argentine sovereign bonds which should help President Kirchner in his almost permanent struggle with multilateral organizations such as the International Monetary Fund.

The leaders also discussed a $4bn gas pipeline spanning more than 12,000km between the two countries as part of a network involving Peru and Brazil.

However the core of the declaration pledges to accelerate the process of incorporating Venezuela as a full Mercosur member and for each country free to choose the most appropriate way to achieving economic and social development.

Venezuela is scheduled to be accepted as a Mercosur full member next December 6 in Montevideo, Uruguay, with the full support of the other partners, Brazil, Paraguay and Uruguay.

Mr. Kirchner also took the opportunity to criticize rich countries farm subsidies and emphasized that, “we believe in integration, without distorting subsidies, with justice, fairness and even chances for all”.

“The recent events and decisions in the Mar del Plata Americas Summit, regarding the integration of the whole hemisphere, showed unfortunately that we were on the right track”, said Mr. Kirchner adding that “we will not draw back on the subsidies issue; integration can’t be achieved willfully”.

During the Americas Summit United States, Mexico, Chile and all participating countries but five drafted a document supporting the resumption of Free Trade Area of the Americas, FTAA, talks which was not accepted by the four Mercosur full members and Venezuela. This led to a dual final declaration and a very strong exchange of words between Venezuela and Mexico which finally ended a week later with the recalling of ambassadors. Mexican president Vicente Fox also accused Mr. Kirchner of not acting as a “neutral” host, to ensure the success of the summit, “as was his task”.

President Chavez anticipated Sunday that a review of the Americas Summit events and consequences figured at the top of the bilateral agenda with his Argentine counterpart.

"We are happy for Kirchner to be here", Chavez told reporters Sunday on welcoming the Argentine president to Puerto Ordaz. "The union of the south is the way to go".

Mr. Chavez proclaimed that Puerto Ordaz, as had been Mar del Plata, was witness of an alternative to "the hegemonic power of Washington", adding that the Caracas-Brasilia-Buenos Aires axis could become the backbone of South American integration.

A leading member of the Argentine delegation and close aide of President Kirchner Planning minister Julio De Vido forecasted that "the industrial capacity of Brazil, the agricultural and industrial capacity of Argentina and the energy capacity of Venezuela (the world’s fifth oil exporter) give Mercosur a boundless horizon".

This was Mr. Kirchner’s third visit to Venezuela. According to the Argentina press Mr. Kirchner since taking office has met at least sixteen times with President Chavez.

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