South American Unity

The official formation of the Union of South American Nations (Unasur) at a summit in Brazil on 23 May marked a significant day for the region, though critics, and particularly the US media, have largely described the union as a paper tiger, quoting skeptics who say regional divisions will render the new bloc dysfunctional.

But to the leaders of the 12 nations who gathered in Brasilia to sign the union into existence, Unasur, which is modeled on the European Union, will prove the economic lynchpin of the region and the bloc will emerge as a major geopolitical force.

The 12 nations of Unasur are Bolivia, Colombia, Ecuador, Peru, Argentina, Brazil, Paraguay, Uruguay, Venezuela, Guyana, Suriname and Chile.

Unasur will be headquartered in Quito, Ecuador, with its parliament in Cochabamba, Bolivia.

Relentless Brazilian diplomacy has propelled the union initiative from the start.
The foundation had already been laid with a number of similar efforts, most significantly the largely Brazilian-led South American Defense Council and MercoSur trade pact.

Importantly, if the union defies critics through pragmatic implementation, Unasur will unite South America’s two major trading blocs, MercoSur and the Andean Community. According to Bloomberg, the united trading bloc will encompass countries with a combined US$2 trillion GDP. The new union has also announced plans to introduce a single currency in the future and to create a single market, eliminating some tariffs by 2014 and the remainder by 2019.

Progress towards the creation of Unasur was furthered in December last year, when seven of the member countries established the South American Bank in Buenos Aires, with the bank to be headquartered in the Venezuelan capital, Caracas. The majority of the bank’s US$7 billion capital is to be divided between Venezuela and Brazil. Brazilian officials have described the bank as a credit institution similar to the World Bank

Brazilian President Luiz Inácio Lula da Silva said on 26 May that the creation of Unasur would make its member countries “stronger and more sovereign,” Agencia Brasil reported. He said the new union would make negotiating with other blocs easier and that increased cooperation would better enable the building of vital regional infrastructure.

In the area of defense, Brazil’s proposal to form a South American Defense Council - rejected during the summit - may be given a new lease on life. Agencia Brasil quoted the Brazilian leader as saying that, with the union now a reality, Brazil should now be able to “better elaborate the proposal and eliminate some convergences” during the next 90 days and perhaps see it approved.

“The truth is, of the twelve countries, only Colombia made an objection. Afterwards, I spoke to president Uribe [of Colombia]. We are going to talk again. I will travel to Colombia on July 20th, and I believe that we can set things straight,” Agencia Brasil reported.

Sam Logan, an expert on Latin America and the co-founder of Southern Pulse Network, is also skeptical that the new South American union will advance beyond the stage of “a well elaborated idea on paper.”

In an interview with ISA, Logan said of Unasur: “This multilateral effort joins a number of other multilateral efforts - Mercosur, Comunidad Andina, Plan Puebla-Panama and ALBA to name a few - in the region that have served as little more than forums for formal interactions between the region’s leaders. Little else is accomplished in these multilateral forums, and there is no indication Unasur is any different.”

According to Logan, “what lies under the surface [of Unasur] seems to be an attempt by Brazil to create a multilateral atmosphere through which it can exert pressure on Venezuela to keep [President Hugo] Chavez in line.”

From the Brazilian point of view, says Logan, “Chavez is a liability for regional unity and security. If Brazil were to take Chavez head on, it would be a geopolitical disaster. But through a multilateral forum, where Brazil’s policies are presented by a number of Chavez’s allies, including Bolivia, Nicaragua and Ecuador, it becomes harder for Chavez to fight back in his vociferous manner. This geopolitical chess move is most closely reflected by the South American Defense Council, essentially created by Brazil.”

Washington’s reaction, too, will be watched closely.

Prior to the Brasilia summit, Chavez, with his trademark charisma, described the US “empire” as Unasur’s “number one enemy.”

US foreign policy toward Venezuela is designed to ensure the country remains isolated within the region, so clearly the creation of Unasur is unwelcome from that respect. However, both the South American Defense Council and Unasur, despite Washington’s fears, provide an opportunity for Brazil to take the issue of Venezuela into its own hands - and Brazil is certainly in a better position to sway Chavez than is the US.

According to Southern Pulse Network: “If Washington meddles in the South American Defense Council, it would find a loud voice in Chavez and the Brazilians would be forced to join in, cursing Washington all the while for not letting them take the lead.”

The same is true for Unasur.

In the meantime, Unasur members, particularly Brazil, are ready to give the union the benefit of the doubt and seem optimistic that regional differences will not stand in the way of the new bloc’s progress and its aim of becoming a major global player and that the Bolivarian dream will come true.
ISA Key points:

• Chavez and Colombian counterpart Alvaro Uribe (a US ally) are in the middle of a major dispute over the leftist Revolutionary Armed Forces of Colombia (FARC), with Colombia accusing Venezuela of financing the rebels.
• The signing of the Unasur treaty was delayed from March until late May over the Colombia-Venezuela dispute, and particularly over an incident in which Colombia raided a FARC camp in Ecuador.

• Colombia has not agreed to join the South American Defense Council because of the FARC crisis and alleged Venezuelan and Ecuadorian support for the rebels. Still, Colombia has agreed to review the proposal again and to make a decision this summer.

• Economic and political difficulties have also arisen over the signed and ratified agreement on the South American Energy Ring, which envisages Argentina, Brazil, Chile, Paraguay and Uruguay integrating their natural gas infrastructures. Argentina and Bolivia have stalled implementation of the initiative, and Chile and Brazil have begun preparations to import gas from outside the region, in an apparent sign of skepticism over the feasibility of the agreement.

• Massive infrastructure projects have met with more success, with the first regional corridor between Peru and Brazil already under construction since 2005 and slated for completion in 2009. Plans for an Interoceanic Highway have also been developed by Unasur.

• Brazil’s efforts, and indeed its role on the world stage, was boosted significantly in November last year, when it revealed the size of its Tupi oil field, believed to contain between five and eight billion barrels of crude oil and natural gas, which would put it on par with Venezuela and some Middle Eastern states.

Source ISA

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