CARACAS, Venezuela (AFX) - President Hugo Chavez said South America's largest trade bloc was 'the road to liberation' on Tuesday as he hosted a six-nation summit marking Venezuela's entry into Mercosur, a step expected to expand his battle against U.S. influence in the region.
Chavez spoke following closed-door talks with Argentine President Nestor Kirchner ahead of the meeting with leaders from the other Mercosur member countries -- Brazil, Uruguay and Paraguay.
'It's the road to liberation,' said Chavez, speaking from the presidential palace during a televised address. 'Today more than ever before it's possible. Let's make it reality.'
Bolivian President Evo Morales, a close Chavez ally, also was to attend the signing ceremony sealing Venezuela's entry into the Mercosur trade bloc, though he has yet to make his own formal overture to become a full member.
Chavez, who blames U.S. trade liberalization policies for creating poverty, has called the expansion of Mercosur a 'historic step' toward South American integration and a victory against Washington's 'imperialist' economic plans for the hemisphere.
Oil-producing Venezuela's entry into Mercosur is expected to boost the clout of the trading bloc, bringing Mercosur's combined gross domestic product to US$1 trillion (euro782 billion) a year -- more than three-quarters of South America's total economic activity.
Under the agreement, Venezuela will be required to adopt a common external tariff system within four years. The level of those tariffs will vary depending on the product but will average about 12 percent, said Eduardo Sigal, Argentina's undersecretary for economic integration.
Venezuela and the continent's two largest economies -- Brazil and Argentina -- will establish free trade zones by 2012. Paraguay and Uruguay will immediately benefit from preferential tariffs for their principal exports to Venezuela before gradually establishing free trade zones by 2013.
Venezuelan critics, largely allied with the political opposition, said the government failed to sufficiently consult Venezuela's private sector about the agreement's details, including the need for measures to protect local industries from cheaper imports.
'The government has made a decision in which geopolitical criteria have prevailed over economic criteria,' Jose Luis Betancourt, president of the main business association, Fedecamaras, told the Venezuelan radio station Union Radio.
Betancourt said Venezuela -- the world's fifth largest oil exporter -- would have little trouble exporting its fuel or aluminum, but that other local products could struggle against the competition.
Chavez also has proposed an extensive natural gas pipeline that would carry gas from Venezuela's offshore reserves to Brazil, Argentina and other countries. He has suggested Bolivia -- which has the continent's second-largest gas reserves after Venezuela -- also could be connected to send its gas to other countries.
The Venezuelan government said in a statement Tuesday that the visiting leaders would also sign an agreement for Bolivia, Paraguay and Uruguay to participate in the pipeline project.
The proposed 5,600-mile (9,000-kilometer) pipeline would be one of the longest ever built. Chavez had said the project will attract foreign investment and eventually bring lower energy prices through cheaper natural gas.
The plan has met with skepticism, however, from energy experts as it faces enormous technological, environmental and economic challenges. Though precise cost estimates for building the pipeline have yet to be calculated, the Brazilian oil company Petroleo Brasileiro SA has said it could run to more than US$25 billion (euro19.5 billion).
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