Why Mercosur Is Stuck with Venezuela
Venezuela’s September 1 demonstrations, in which as many as a million people took to the streets of Caracas to demand a change in government, were certainly impressive. But were they effective? If the goal was to fundamentally alter the country’s political direction, the answer is probably “no.”
Despite the buzz generated by this month’s protests (dubbed “The Great Taking of Caracas” by the opposition), the chances of President Nicolás Maduro losing his job this year are slim. A recall referendum held before January 10, if won by the opposition, would lead to early general elections and a likely opposition victory. But after January 10, a recall would merely replace Maduro with the vice president of his choosing through the end of his term in January 2019.
The latter represents a much more palatable alternative for Venezuela’s leadership than allowing for politically risky early elections; a recall referendum that replaces the president but keeps the governing United Socialist Party of Venezuela (PSUV) in power could actually be a convenient opportunity for the party to get rid of Maduro, who is seen as incompetent and uncharismatic by most PSUV stalwarts.
The result is that chavismo is increasingly likely to celebrate 20 years in power before new general elections are held in 2019, giving the PSUV time to regroup and recalibrate following Maduro’s disastrous tenure.
A PSUV government will be ever more dominated by the armed forces in the coming months and years. Not only are the two leading candidates to replace Maduro both generals (Minister of Defense Vladimir Padrino and Marco Rodríguez Torres from the military), but the armed forces already control a third of all ministries, many of which are essential to the economy. They also control airports, sea ports, all border posts and — most importantly from a political perspective — the networks needed to distribute food and medicine, currently in short supply.
It is partly this outlook that explains the extremely cautious response by policy makers in the South America to Maduro's authoritarian tendencies. While many believed Brazil's foreign policy under new President Michel Temer would be fundamentally different from that of his predecessor, its substance vis-à-vis Venezuela has seen little change. Not allowing Caracas to assume the (largely symbolic) pro-tempore presidency of Mercosur was new, of course, but it was far from a consensual decision in Brasília. Rather, the decision represented a slim internal victory by Foreign Minister José Serra against skeptics in the presidential palace and in the foreign ministry. But even Serra does not seek to invoke Mercosur's democratic clause, which would see Venezuela’s suspension from the trade group.
In addition to authoritarianism and human rights violations committed by the Maduro regime, Venezuela complicates an urgent debate about the future of Mercosur. Under Chávez, Venezuela joined Mercosur for geopolitical purposes, as it sought to balance Brazil in South America. Brazil, in turn, supported the move in the belief that it would restrain Venezuela to some degree.
But Caracas never intended to adapt to the economic rules and trade norms of the regional body, and that’s far from surprising: From an economic point of view, Mercosur's protectionism makes no sense for Venezuela's economy. As opposed to Brazil and Argentina, which want to protect their industries from competition in China, Europe and North America, Venezuela only exports oil and imports virtually everything it consumes. A growing percentage of the products it imports come from China (which are often tied to Chinese credit), and adopting the common external tariff would generate resistance in Beijing, something Caracas cannot afford. This shows that even regime change in Venezuela would not change the underlying mismatch that its Mercosur membership creates.
Despite all this, Venezuela is very unlikely to leave Mercosur or downgrade its membership, something that policy makers in Caracas fear could be seen as a sign of weakness by Venezuelans. Rather, it is in the country’s interest to remain in the grouping (and keep it divided and largely dysfunctional) as long as possible to avoid being publicly and unanimously shamed.
Considering how reluctant policy makers in Brasília, Montevideo and Buenos Aires are to even consider invoking the democratic clause, excluding Venezuela permanently seems highly unlikely, too. There are good reasons for this: Kicking out a member from any international institution is traumatic and could be used by the Venezuelan government for nationalist purposes and might even increase its popularity.
Of course, it would be too simplistic to argue that Venezuela is Mercosur's only problem. Indeed, not everybody in Brasília and Buenos Aires thinks the brawl with Caracas is entirely negative: after all, it provides a useful distraction to avoid discussing the organization's more fundamental issues, such as the lack of a coherent long-term strategy — not only vis-à-vis the reduction of exceptions and internal barriers, but also regarding the negotiation of global trade agreements. Several protectionist stakeholders in Brazil and Argentina do everything possible to keep Mercosur from making much progress, and they have little interest in stopping the farce Venezuela's membership has become.
Still, it has become painfully evident that Venezuela's accession produced high costs for Mercosur and the regional policies of its member countries. Its currently acephalous nature has not only profoundly damaged its reputation abroad, but, since Uruguay left the pro tempore presidency on August 1, also affected its capacity to take decisions. The debate about Venezuela's role in the club will divert valuable time both Temer and Macri need to deal with other urgent international challenges.
Rather than “solving” Mercosur's Venezuela problem, policy makers will for now have to content themselves with administering it. It will be left to Temer's (and Serra's) successors to find a lasting solution.
Stuenkel is a contributing columnist for Americas Quarterly and teaches International Relations at the Getulio Vargas Foundation in São Paulo. He is the author of The BRICS and the Future of Global Order (2015) and the forthcoming Post-Western World (2016).