With Mercosur Ties Still Frayed, Paraguay Explores Pacific Alliance Options.
By Eric Farnsworth, on
As a founding member of Mercosur—the 1991 agreement that created the group is actually the Treaty of Asuncion—Paraguay is also a signatory to the 1998 Ushuaia Protocol on Democratic Commitment committing each party to “fully functioning democratic institutions” and envisioning the suspension of membership “in the event of a breakdown of democracy.” Paraguay’s Congress impeached and removed Lugo from office in June 2012. His opponents claimed that Lugo, a former priest who exhibited increasingly erratic behavior in office, was getting too close to then-Venezuelan President Hugo Chavez. While the impeachment process appeared to have been conducted according to constitutional requirements, the president’s rapid removal without the opportunity to mount a considered defense raised eyebrows across the hemisphere. Observers both in and outside Paraguay generally claimed the charges were politically motivated and that Lugo’s removal constituted the suspension of democracy.
The three other Mercosur nations—Argentina, Brazil and Uruguay—agreed, and suspended Paraguay until such time as the democratic process was restored. At the same time, Paraguay’s suspension opened the door for the rapid inclusion of Venezuela, whose own request to join Mercosur had been held up by Paraguay’s Congress since 2006. The requirement for “fully functioning democratic institutions” would have seemed to be a block to Venezuela’s ambitions for membership. But with Paraguay no longer able to filibuster admission, the other three nations welcomed Venezuela into Mercosur straightaway, despite a requirement that membership can only be offered by consensus, with all current members present.
To make matters worse, then-Venezuelan Foreign Minister Nicolas Maduro, who went on to succeed Chavez as president after the latter died of cancer in March 2013, was caught on tape in the immediate aftermath of the impeachment trying to convince the commander of Paraguay’s armed forces to revolt in favor of Lugo. Maduro’s efforts to foment a military coup were rejected, but the Venezuelan president remains persona non grata in Asuncion and was intentionally omitted from the invitation list for Cartes’ August inauguration.
Enter Brazil, whose strategic regional interests include strengthening Mercosur as the primary vehicle—along with UNASUR, from which Paraguay was also suspended—for expanding its hemispheric reach and influence. Cartes’ April election and subsequent inauguration cemented the re-establishment of Paraguay’s full democratic process, the condition required for Mercosur to lift Paraguay’s suspension. On Sept. 30, less than two months after taking office, Cartes traveled to Brasilia for a state visit that emphasized the strength of the bilateral relationship and a mutual commitment to democracy, human rights and the rule of law.
All better now, right? Not necessarily. Although Paraguay’s suspension has been lifted, Asuncion says it will not return to Mercosur until the legal concerns regarding Venezuela’s entry into the union have been resolved. Significantly, Cartes wants legal certainty, not a political deal.
In the meantime, a full-court press is being applied by Brasilia and Caracas—and, presumably, Buenos Aires and Montevideo, too—to smooth the way for Paraguay’s full reintegration. In Suriname recently, Venezuela’s Maduro apologized for circumventing the Paraguayan Congress, and he sent his foreign minister, Elias Jaua, to Asuncion on Oct. 9 for the first high-level visit of a Venezuelan government official to Paraguay since relations cratered in 2012. The two foreign ministers announced several confidence-building steps toward full normalization, but Maduro remains unwelcome in Asuncion, and despite Jaua’s urging for rapid action, as of now there is no commitment by Cartes to resubmit a bill to Congress regarding Venezuela’s membership in Mercosur. Keeping the two parties talking will be the charge of Brasilia, which has made clear in both rhetoric and action that resolving the Paraguay-Venezuela dispute within Mercosur is a high priority and, according to press reports at least, of personal interest to President Dilma Rousseff.
It would be a mistake, however, to believe that even a quick resolution of the dispute would restore the status quo ante. That is because, in the intervening months, Paraguay’s citizens have elected a pro-business leader who is willing to look at all options in order to support Paraguay’s future growth path. Unencumbered by Mercosur’s strict constraints during the country’s suspension, Paraguay’s government and business elites were freed to imagine other potential options. As a result, though it lacks coastline of any kind and has no access to the Pacific—the country’s Parana River flows eastward, to the Atlantic—Paraguay’s traditional geographic orientation may be shifting somewhat. The country has asked for observer status in the Pacific Alliance, which links Chile, Colombia, Mexico and Peru, and would likely join as a full member if invited to do so.
That would throw a significant wrench into the gears of Brazilian plans, because Mercosur members are only able to negotiate free trade and economic integration agreements as a bloc. As a result, Brasilia is predictably opposed. Recognizing that Paraguay—and also Uruguay, for that matter—is beginning to seek diversification from Mercosur will ensure that Brazil treats the issue of reintegration seriously. At the same time, if it were more strategically aware in the Western Hemisphere, Washington would do its best to encourage Paraguay’s economic diversification.
This is not the Cold War, and Paraguay is not Eastern Europe. But it is nonetheless in the middle of an interesting power game right now in South America. Cartes now has the leverage to carve a little space out from under Brasilia, and he appears to want to use it. This issue has yet to fully run its course.
Eric Farnsworth heads the Washington office of the Americas Society/Council of the Americas, whose Energy Action Group promotes sound energy policies for the Western Hemisphere. During the Clinton administration, he was the senior adviser to the White House special envoy for the Americas.