Venezuela becomes member of Mercosur trading bloc

After a six-year wait, Venezuela formally joins the Mercosur regional trading bloc as a full member Tuesday at a Brasilia ceremony to be attended by its mercurial President Hugo Chavez. Until now an associate member, the oil-rich nation of 30 million people will join current members Argentina, Brazil, Uruguay and Paraguay, which was suspended from the group late last month until new elections following the ouster of its president Fernando Lugo. Venezuela's membership in the customs union had been blocked since 2006 by conservative Paraguayan lawmakers who viewed Chavez as anti-democratic. "It's an admission very much wanted by the government of President Chavez," said Fernando Gerbasi, a former Venezuelan ambassador to Brazil. "But I don't know if that's the case for the rest of Venezuela." "Brazil and Argentina are much bigger economies compared to Venezuela, widely diversified," he told AFP. "Venezuela has turned into a mono-producer and mono-exporter of oil and oil derivatives. So how are we going to compete and for what, I don't know." Tuesday's ceremony will mark the return of Chavez to the international stage after a battle with cancer kept him largely out of the spotlight for months. The 58-year-old leftist firebrand, who was diagnosed with cancer in June 2011, said earlier this month that, after a long series of treatments and two operations in 2011 and 2012, he was "healed." Chavez, who recently made his first big-crowd appearances, is seeking re-election in an October 7 election; most polling organizations give him leads from zero to 35 percent over his rival Henrique Capriles. The Venezuelan leader is expected to seek to capitalize on his country's Mercosur admission, according to political analyst Farith Fraija. International relations expert Edmundo Gonzalez said the push to join Mercosur may be part of "Chavez's calculated political move" to widen the franchise of leftist Latin American nations, hostile to Washington. But some analysts question the value of Venezuela's presence within the bloc. "Who can doubt that with Argentina and Venezuela in the bloc it will be difficult to reach any free trade agreements with third countries ?" Brazilian former diplomat Rubens Barbosa said in a recent column in the daily O Estado de Sao Paulo titled "Requiem para Mercosur". "The admission (of Venezuela), decided for political reasons, may have a very high price for the founding members," added Barbosa, who was involved in the creation of Mercosur in the early 1990's. Meanwhile Sao Paulo University economist Celso Grisi agreed that Venezuela's admission was negotiated for "ideological rather than economic reasons". "Besides, it's a lack of respect for Paraguay's position. Brazil ended up putting pressure for Venezuela's entry," he added. Brasilia views Venezuela's admission as strategic as the two countries had nearly $6 billion in bilateral trade last year, with a surplus of more than $3 billion for Brazil, whose major companies have $20 billion invested there. Venezuela boasts the world's largest proven oil reserves. Uruguayan President Jose Mujica for his part defended Caracas' entry while pointing out "political considerations prevailed over legal ones." The catalyst was Lugo's abrupt ouster last month on charges of malfeasance linked to a deadly land dispute, which was widely criticized by other Latin American leaders, who argue the president did not have time to mount a proper defense. Lugo's successor Federico Franco was barred from participating in a Mercosur summit in the Argentine city of Mendoza last month and Asuncion was temporarily suspended from the bloc pending new elections expected next April.