Weekly Report - 3 February 2011 (WR-11-05)

URUGUAY | Mercosur. “The Venezuelan people need to be in Mercosur, or else we are idiots." This characteristic straight-talking from President José Mujica, during his second official visit to Venezuela last week en route from Peru, followed the signing of 14 bilateral cooperation accords. Mujica said he had come to Caracas “to tell the continent that Venezuela must enter Mercosur". In reality he was only telling Paraguayan senators where their duty lay as they alone are preventing Venezuela from enlisting in the Southern Cone trading bloc as a permanent member.
Uruguay said Venezuela's inclusion in Mercosur would be a big boost for intraregional trade. Uruguay itself exported US$248m of products to Venezuela in 2010, largely dairy products (US$157m) and frozen meat (US$44m). Venezuela sends 40,000 barrels per day (bpd) of crude the other way at preferential rates.
Mujica also threw his weight behind Venezuela's former electricity minister, Alí­ Rodrí­guez Araque, who previously headed the state oil company Pdvsa, to become the new secretary general of the Union of South American Nations (Unasur) to replace the deceased former Argentine president Néstor Kirchner. This issue is likely to split Mercosur, as Brazil, for one, will look askance at Venezuela securing the top job.
During his state visit to Peru, the first by a Uruguayan president for 25 years, Mujica told his Peruvian peer, Alan Garcí­a, that he would seriously consider his flagship five-year plan for cutting arms spending in the region and devoting the savings to eradicating poverty.

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