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Dec. 2: Mercosur Suspends Venezuela's Membership

2 MINS READDec 2, 2016 | 15:29 GMT

The foreign ministers of Argentina, Brazil, Paraguay and Uruguay agreed to suspend Venezuela's membership in Mercosur on Dec. 1 and will notify Caracas of the decision Dec. 2. Mercosur member countries said that Venezuela does not comply with a sufficient number of the bloc's rules on trade and human rights: only 16 of the 57 that it signed. Venezuelan Foreign Minister Delcy Rodriguez, however, has rejected the decision and calls it an aggression against Caracas.

Argentina, Brazil and Paraguay wanted to expel Venezuela from the trade bloc in September but could not convince Uruguay to back them on the matter. They came to a compromise, agreeing to give Venezuela until Dec. 1 to comply with Mercosur's rules. All four countries agreed at the deadline that Venezuela had not met the requirements. In August, Mercosur members blocked Venezuela from assuming temporary presidency of the bloc; Argentina is expected to take up the now-vacant post by the end of the year.

Venezuela's suspension will not significantly hurt Mercosur's overall trade, given that exchange with the country has dropped dramatically over the past couple of years. Until last year, Venezuela was Brazil's number seven top export market, but this year it dropped to number 37. At least 449 Brazilian companies had already cut off exports to Venezuela because of payment problems. Brazilian exports between January and October of this year dropped 61 percent from the same period in 2015, reaching $980 million, the lowest level since 2003. Similarly, Uruguayan dairy producers have reported payment delays from Venezuela. The problems stem from Venezuela's lack of foreign currency. The country's international reserves have dropped 33.2 percent so far this year, reaching 10.8 billion. Venezuela has begun paying for its food imports from some countries, including Argentina and Uruguay, with oil.

Human rights have also become a point of contention. Mercosur member countries have expressed discontent with Venezuela's refusal to release more political prisoners and to allow a referendum recall of President Nicolas Maduro. The suspension shows that Caracas is becoming increasingly isolated in the region. It may also pressure the Venezuelan government to make more concession in its dialogue with the Venezuelan opposition, which is supposed to resume Dec. 6 and which the opposition has already threatened to abandon because of lack of progress.

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