Leaders from across Latin America and the Caribbean pledged closer ties as they formed a new bloc on Saturday including every nation in the hemisphere except Canada and the US.

The leaders of 33 Latin American and Caribbean countries met in Venezuela this weekend to formally launch the new regional grouping. It is a welcome opportunity for Venezuelan President Hugo Chavez to step onto an international stage following what he says is his successful battle against cancer.

The Community of Latin American and Caribbean States (CELAC) is just the latest in a series of Latin American groupings, which also include the Union of South American Nations (UNASUR), the Andean Community, the Rio Group and the economic alliances Mercosur and ALBA.

"The previous pacts such as MERCOSUR and UNASUR are regionally limited to South America. CELAC however also includes Central America and the Caribbean," said Thomas Fritz of the Center for Research and Documentation Chile-Latin America in Berlin.

"None of the existing alliances works well," said Peter Rösler, deputy director of the Hamburg-based Business Association for Latin America. (LAV). However, he remains skeptical about the founding of CELAC.

Venezuelan President Hugo Chavez (right) is the host of the founding meeting

He argues that Mercosur, with its four member countries, is already hampered by disputes between Argentina and Brazil, which undermine the common market with import tariffs.

"Now another organization has been set up, on top of this, which is bigger in terms of geography," Rösler said. "If CELAC works, it won't be a bad idea. But based on our previous experiences with such alliances, there is reason to be doubtful. First, life needs to be breathed into the existing alliances," he added.

On the surface, at least, no other region offers as good a framework for regional integration as Latin America. Apart from Brazil, around 500 million people from Mexico to Tierra del Fuego speak the same language. They also share similar histories, with most having achieved their independence from Spain around 200 years ago. With the notable exception of Cuba, they all have democratically elected governments.

Competition for the OAS

CELAC is not only an attempt to foster unity in the region, but also to confidently stand up to the United States in its own "backyard." Upon closer inspection it becomes clear that the Community of Latin American and Caribbean States is nothing more than a new incarnation of the Organization of American States – without the United States and Canada.

Even before the conference began, Ecuadorean President Rafael Correa may well have been expressing the wishes of many, when he said that he hoped CELAC would replace the OAS "sooner rather than later."

However, the question of how to approach relations with the United States could soon become a bone of contention within CELAC.

The common South American market often pits Brazil against Argentina

"This signal of political emancipation from Washington comes from only one part of the membership, it's a priority for the left-of-center governments. Venezuela is the driving force here," Thomas Fritz said. "However, Brazil takes on more of a mediating role when it comes to greater autonomy from the OAS. Chile and Peru, on the other hand, strive for close cooperation with the US."

Chile, Peru and Colombia have each signed bilateral free trade agreements with Washington. Together with Mexico, these three countries are already working on another regional alliance.

"These economically liberal orientated countries are aiming to create a counterweight to Mercosur," Thomas Fritz said. This is "in contrast to the governments that favor more state intervention and an active social policy."





Fritz sees Mercosur as the most developed regional alliance.

"Here, internal tariffs have been eliminated and joint external tariffs introduced. These decisions required the member countries to surrender some of their national sovereignty, "Fritz said.

However Peter Rösler of the LAV argues that this agreement has repeatedly been undermined by the "political whims of the governments" of member states.

"There is a lack of institutionalization of the integration initiatives. There are no clear rules that could be used to punish those who violate the agreement."

Inevitable tensions

CELAC promises to have a hard time trying to bring the conflicting interests of Latin American countries under one organization.

Thomas Fritz sees a demand from left-of-center governments for a CELAC council of human rights as particularly problematic.

"Venezuela and Ecuador want to bypass the Inter-American Human Rights Commission of the OAS, which has recently criticized these countries' media laws."

The South American community, UNASUR, is one of many attempts at more regional integration

Presidents Hugo Chavez and Rafael Correa rejected this criticism as meddling in domestic affairs.

"What they hope to gain from a CELAC human rights council is that they will be left alone," Fritz said.

Given the differing attitudes towards the US, even a common Latin American foreign and security policy seems hardly realistic. The military agreement between Colombia and the United States, which allows the US to use bases in the South American country angers Venezuela in particular. Venezuela and others fear that depending on how interests develop, this US military presence in the heart of South America might not necessarily stop at its borders.

New partner for the EU?

Whether this new organization develops into an internationally respected partner will depend upon how strong the institutions are that it develops, Thomas Fritz said.

An initial test could come at the next EU-Latin America summit next year in Santiago de Chile. In any case, the established alliances in the region will continue to be interesting negotiating partners for the EU, Fritz's predicts. The EU has already signed bilateral association agreements with Mexico and Chile, and it is in negotiations with the Andean Community (Peru, Bolivia, Ecuador, Colombia) and the countries of Central America.



In the medium term, however, Europe will have no choice but to accept the fact that it is bound to see its economic and political significance decline in Latin America.

"Latin America has a great interest in diversifying its markets and Europe can not compete as a market with emerging countries like China and India," Fritz said.

Peter Rösler points out that China already is the largest export market for Chile, Argentina and Brazil.

"The booming Chinese economy needs raw materials on a scale that neither Europe nor the US can deliver," he said. To secure its supply of raw material and foodstuffs, China is stepping up investment in Latin America.

"If China builds industrial enterprises in Latin America, in the automotive industry, for example, German companies will have to face up to the competition from Asia in Latin America," Rösler said.

Author: Mirjam Gehrke / pfd

Editor: Andreas Illmer