Venezuela Formally Joins Mercosur Trade Bloc

Venezuela formally entered Mercosur Friday, increasing the South American trade bloc's economic might and vowing to transform the once-sleepy policy organization into a force for profound social change.

President Nestor Kirchner welcomed the "historic" addition of oil-rich Venezuela, the continent's No. 3 economy after Brazil and Argentina, launching a round of speeches by Latin America's leading leftists, who asserted the region's independence from a Washington model many of their citizens see as a failure.

Anti-U.S. crusader Hugo Chavez immediately urged Mercosur to put aside internal squabbles and stand against the U.S.-backed free-market policies he says "enslaved" the region in debt to the International Monetary Fund.

"Latin America has all it needs to become a great world power. Let's not put any limits on our dreams. Let's make them reality," the Venezuelan leader declared.

The addition of Venezuela gives Mercosur a combined market of 250 million people and a combined output of $1 trillion in goods and services annually, said Brazil's president, Luiz Ignacio Lula da Silva.

NAFTA, combining the markets of the United States, Canada and Mexico, has 450 million consumers and a combined gross product of about $14 trillion.

Still, Silva said "no one's talking anymore" about the U.S.-backed Free Trade of the Americas proposal blocked by Venezuela and the Mercosur nations last year.

Silva called on his fellow leaders to work together to bring Bolivia and other nations into Mercosur, making it even more powerful.

"Who knows?" Silva said. "We could come to have a Merco-America and not just a Mercosur!"

Cuban President Fidel Castro and Bolivian President Evo Morales, taking part as observers, applauded their ally Chavez, who praised Castro's willingness to send doctors and teachers to their countries. Chavez said the Cuban leader "can help us all a great deal" as Mercosur makes greater efforts to end poverty, hunger and joblessness.

"We are entering a new stage of Mercosur," Chavez said.

Kirchner agreed, saying a growing Mercosur should fight inequality as a way of bolstering their nations' economies and helping them compete in the global economy. "Democracy, human rights, liberty and the fight against poverty" are the basis for a "new world order" in the region, one with its own identity, Kirchner declared.

Castro, who traded his green army fatigues for a crisp blue suit, noted the friendly atmosphere, getting loud laughs when he told Chavez, "Hugo, I am listening to you, almost like a student!"

But the gathered leftists presidents became more serious as Castro railed against U.S.-style capitalism and defended Cuba's economic model.

The Mercosur leaders also concluded a deal Friday to foster greater trade with Cuba, despite a 45-year-old U.S. embargo of the island. The accord, announced here, is intended to foster a greater exchange of goods between Mercosur nations and Cuba through tariff reductions and a promise that neither side will arbitrarily hike import fees or taxes.

Such developments have worried those who lament the decline of U.S. influence in the region.

Michael Shifter, an analyst at the Inter-American Dialogue in Washington, said Venezuela's entry should be a "wake-up call" for U.S. officials who have been distracted from Latin America by conflict in the Middle East.

"Mercosur seems to have less and less to do with free trade and more to do with politics," he said.

Once confined to the Southern Cone nations of Brazil, Argentina, Paraguay and Uruguay, Mercosur now ranges north to Venezuela's Caribbean coast.

"It is hard to see the geographical logic behind Mercosur anymore," Shifter said. "But the political logic is one basically opposed to the United States. It's an effort to try to build and consolidate an alternative alliance to U.S.-backed free trade policies."

Uruguayan leftist Tabare Vazquez and Nicanor Duarte of Paraguay also took part, and Chile's moderate leftist President Michelle Bachelet attended as an observer.

But Castro got much of the attention. Now 47 years in power, he turns 80 on Aug. 13 and rarely travels now to international summits. But he scoffed at the latest rumors of his death.

"I feel very well; my health is excellent," Castro told a Venezuelan state television crew, adding playfully: "They have tried to kill me many times over ... I die almost every day and for that reason I enjoy myself greatly."

Cordoba holds special significance for Castro. The central Argentina province was the boyhood home of Ernesto "Che" Guevara, the Argentine who gave up a future in medicine to join Cuba's revolution.