"There is no understanding of the importance of Mercosur."

Felipe Prestes - South 21- The resignation of Brazilian diplomat Samuel Pinheiro Guimarães from his position as high representative of Mercosur, amidst Paraguay's political crisis, has generated speculation. In conversation with South21Guimarães denied that his departure had any connection with the crisis, although at one point he said "I believe not," leaving that possibility open. "The Council meeting was the opportune moment for my resignation," he assured.

Samuel Pinheiro Guimarães stated that the reasons for his departure are all in report he submitted when requesting his resignation.In the document, he describes the current state of the bloc as "limping." The diplomat points to the need for more meetings between the presidents of the member countries and greater convergence between the work of each governmental area and its counterparts in neighboring countries. "There is no understanding of the strategic importance of the bloc for South America," he said.

In a conversation lasting about 20 minutes, the diplomat addressed these and other obstacles facing Mercosur. He also spoke about Venezuela's entry, the coup in Paraguay, and the lack of interest from the mainstream Brazilian press in the bloc. "They have no interest in Mercosur being a success. They systematically try to portray Mercosur as a failure."

Sul21 – I would like to talk about your departure from Mercosur.

Samuel Pinheiro Guimarães – I don't think it's necessary. The reasons are in the report in which I announce my resignation.

Sul21 – So, it had no connection whatsoever with the situation in Paraguay?

Samuel Pinheiro Guimarães – No, it has nothing to do with Paraguay. I had already decided that beforehand.

Sul21 – Given the timing, wasn't the situation in Paraguay a trigger for your departure?

Samuel Pinheiro Guimarães – No, it wasn't. I don't believe so, because it was the time of the Council meeting where I had to present my report. So, it was the opportune moment for me to submit my resignation.

Sul21 – So this was something you had been considering for quite some time.

Samuel Pinheiro Guimarães – Yes.

Sul21 – How do you analyze the measures taken by Mercosur, the suspension of Paraguay without economic sanctions?

Samuel Pinheiro Guimarães – The suspension of Paraguay stems from a coup that took place in that country, in which a president directly elected by the people was deposed by a Congress elected through a list system, where people do not actually vote. They did not receive a popular vote. This Congress is dominated by traditional Paraguayan parties, which took advantage of last-minute procedures to promote the deposition of President Lugo. Therefore, the sanction was the suspension. There was no interest on the part of other countries in causing harm to the Paraguayan people themselves with economic sanctions. Paraguay is a landlocked, underdeveloped country with low social indicators of all kinds.

Sul21 – Venezuela's entry has caused controversy. What is your analysis? Perhaps it would have been better to wait for the end of Paraguay's suspension?

Samuel Pinheiro Guimarães – The objective fact is that Venezuela's entry had already been approved by Paraguay itself in the initial protocol of intent. Negotiations with Venezuela, from a technical standpoint, ended in 2006. And the Paraguayan Senate had been preventing Venezuela's entry into Mercosur. The Paraguayan Senate might never have approved Venezuela's entry, given its highly conservative composition. Naturally, there is a much greater interest in political division in South America, in preventing Venezuela's entry into Mercosur and potentially overthrowing President Chávez. These interests had been preventing Venezuela's entry. With Paraguay suspended, due to its regime being considered undemocratic by the other three states, the other states can perfectly well accept Venezuela. There is a very legalistic concern about Venezuela's entry, but these people believe there was no coup in Paraguay. In reality, they are not concerned with Paraguay, but with Venezuela's entry into Mercosur.

Sul21 – What is the importance of Venezuela's entry into Mercosur?

Samuel Pinheiro Guimarães – First of all, Venezuela is an extremely resource-rich country with a large market, with just over 20 million inhabitants. It currently has the largest oil reserves in the world, ahead of Saudi Arabia. Therefore, there is a very strong interest in this country returning to the American orbit. Venezuela's entry into Mercosur protects it from coups d'état that could occur.

Sul21 – And commercially?

Samuel Pinheiro Guimarães – In the case of Venezuela, Brazil had a surplus of US$3 billion last year. Venezuela has a development process underway, building its infrastructure, its industrial base, and even its agriculture. And in this, it depends on the cooperation of countries like Brazil, Argentina, and Uruguay. Venezuela itself, until recently, supplied oil to Paraguay under favorable conditions.

Sul21 – From what can be inferred from the report, you felt that the Mercosur member states are making little effort to make the bloc more effective. Is that correct?

Samuel Pinheiro Guimarães – I think there's a lack of understanding of the strategic importance of the bloc for South America. There's no understanding whatsoever of what Mercosur should be.

Sul21 – The mainstream Brazilian press often points to Argentine protectionism as the main factor preventing the bloc from gaining momentum. Based on your report, you have a different view.

Samuel Pinheiro Guimarães – Completely different. Trade between the countries of the bloc has multiplied tenfold, much more than the expansion of the foreign trade of these countries. And it is a qualitatively superior trade, because most of Brazil's exports, but also those of the other countries within the bloc, are manufactured goods. While our exports to Europe and China are primary products. We have had an extraordinary surplus with Argentina in recent years. There is no understanding of how trade should be conducted, nor how the economic development of the countries in the region should be achieved.

Sul21 – In your report, you state that Chile, Colombia, and Peru are ineligible to participate in Mercosur.

Samuel Pinheiro Guimarães – They cannot participate because they have trade agreements not only with the US, but with many other countries, so they cannot participate in the Common External Tariff. They also cannot have common industrial policies because they are prevented from doing so by the agreements they have signed. We are interested in economic cooperation with them, but they cannot be part of Mercosur due to the options they have adopted.

Sul21 – You say that the existence of Mercosur is bad for external powers. Do you see powers working to destabilize the bloc, based on what is happening in Paraguay?

Samuel Pinheiro Guimarães – No, there isn't any… Now, as I said in the report, there is no interest whatsoever from the major powers, nor from the large blocs of countries, in strengthening other blocs, because they prefer to negotiate with countries individually. So, for the European Union, it is much better to negotiate with an isolated country than with a country that is part of a bloc. This is normal. Just as the US, after a certain period, had a strong position in relation to the European Union. It is easier to negotiate with Belgium in isolation than with the EU.

Sul21 – But as soon as the coup took place, possible negotiations for an agreement between Paraguay and other powers began to emerge.

Samuel Pinheiro Guimarães – Within the Mercosur countries themselves, there are groups that intend to align themselves with countries from outside the country.

Sul21 – Do you see this isolation of Paraguay as a possibility for them to leave Mercosur?

Samuel Pinheiro Guimarães – They have every right. Paraguay is a sovereign country. They may have this illusion.

Sul21 – In the report you say that there is a lack of dissemination of news about Mercosur. What actions would you highlight that were carried out by Mercosur and that were not properly publicized?

Samuel Pinheiro Guimarães – I'll give you two examples. Paraguay owns half of the Itaipu Dam. However, even today, the Paraguayan capital experiences periodic power outages because there is no transmission line between the dam and Asunción. With FOCEM funds, a transmission line is being built – not a loan, it's free – at a cost of US$500 million. This will transform the Paraguayan economy. It will allow Paraguay to industrialize, because without energy there is no industry. This is a very important thing that has never been publicized. An electrical connection line is being built between Brazil and Uruguay, which will solve Uruguay's energy problems, which are also important. The entire Uruguayan railway network is being restored, which is extremely important for transporting timber. This is not reported in the newspapers. What is reported are minor incidents, the retention of goods. Even so, trade is extremely high.

Sul21 – Do you think the mainstream press isn't very interested in Mercosur?

Samuel Pinheiro Guimarães – No, the mainstream press has no interest in Mercosur being a success. It systematically tries to portray Mercosur as a failure. They should be satisfied with Paraguay's suspension. They are not satisfied because of Venezuela's entry, not because of Paraguay. The mainstream press has a different view of the international economy; it has a traditional view, a view that corresponds to that of the great powers, of total freedom of trade, and so on. Therefore, a group of countries seeking to negotiate from a stronger position with the US is not in the mainstream press's interest. They believe that Brazil should negotiate alone and, therefore, be weaker.