[UPDATED] Unfolding Crisis over Venezuela: Regional Integration or the Sovereignty of States?

Disagreement over Venezuela's membership in Mercosur is pitting the sovereignty of Paraguay against the political authority of the larger region.

In brief: the majority in Paraguay's congress oppose a proposal to make Venezuela a full member of Mercosur. The other three member countries (Argentina, Brazil, Uruguay) have supported Venezuela's entrance, as does the current president of Paraguay (Fernando Lugo). Rumors are spreading that Mercosur will force Venezuela's full entry through some sort of declaration that effectively circumvents the authority of Paraguay's congress and, by extension, the will of the Paraguayan people.

Within Paraguay, this is seen as a violation of Paraguay's sovereignty. Uruguay is hosting a Mercosur summit today, which will be attended by all four presidents, foreign ministers, and the heads of the central banks. Other agenda items have been overshadowed by the question of whether Venezuela's membership will be imposed upon Paraguay.

The Common Market of the Southern Cone (Mercosur) was created in 1991 by the Treaty of Asunción, signed by the four initial member countries: Argentina, Brazil, Paraguay, and Uruguay. According to the Treaty (Article 20), new members must be approved by unanimous consent of current members. Treaties (unlike "Agreements") require the approval by national parliamentary bodies--this is why they have so much more weight than just agreements signed by presidents. The former presidents of the four countries approved Venezuela's full membership in 2006, which was later ratified by the congresses of Argentina, Brazil, and Uruguay. Only Paraguay held out.

In Paraguay and Uruguay, Mercosur is often depicted as yet another way for the two large countries to impose their will on their smaller neighbors. While there has been a "leftward turn" in Latin America (all four countries are governed by left-of-center presidents), Hugo Chavez is not popular in Paraguay. Although the previous Paraguayan president (a Colorado Party conservative) approved Venezuela's full membership, there is a perception that leftist former Bishop Fernando Lugo is forcing Paraguay into a Bolivarian revolution. Moreover, this is framed within Paraguay (and now Uruguay) as a recapitulation of the War of the Triple Alliance (1865-1870), where the combined forces of Argentina, Brazil, and Uruguay demolished Paraguay.

But what this ultimately may be about is a classic power struggle within Paraguay between the executive and legislative branches, not between "right" and "left."

Venezuela and Ecuador are in the process of becoming full member countries of Mercosur. Presidents Hugo Chavez and Rafael Correa were present at the meeting today in Mercosur, arguing for the full admission of their countries. Correa has urged a greater closeness between Mercosur and CAN (the Andean Community-- Venezuela used to be a full member until 2006, when it withdrew from the agreement and sought to enter Mercosur).

As expected, some kind of solution that would work around the stalemate in Paraguay's congress was offered: a Special Commission has been created to determine the terms by which Venezuela and Ecuador will enter Mercosur. The commission will be directly appointed by the presidents of the full member countries (read: not depend on congress).

And though tomorrow I'll discuss the "energy integration" components of today's summit, I want to end with the terrible tragedy that shook the meeting: Iván Heyn was found hanged in his hotel room this afternoon, an apparent suicide. Mr Heyn, Argentine, 34 years old, was Cristina Kirchner's newly appointed Undersecretary of Foreign Trade and was participating in the meetings in Montevideo.

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