The Suspension of Venezuela from Mercosur: Economic and Political Impacts for Brazil

Abstract

Venezuela's entry into Mercosur (the Common Market of the South) in 2012 represented an opportunity for a nexusbetween the Amazon Basin, the River Plate Basin and between the different cooperation projects that exist among them.This movement could, therefore, serve as an impetus for regional development through economic, political, energy andsecurity integration. However, in 2017 the Andean country was suspended from the bloc. This paper aims to identify themain economic and political impacts of this suspension for Brazil. A causal hypothesis testing methodology is used throughprimary data collection and a specialized literature review is also done to answer: what are the economic and politicalimpacts, for Brazil, of Venezuela's suspension from Mercosur? The hypothesis is that Venezuela's suspension from Mercosurhas deteriorated bilateral trade with Brazil; the possibility of economic integration between the northern and southernregions of the continent and consequently, stability and regional development. The hypothesis has only been partiallyproven. The negative effects mentioned were detected during the period under review. However, the Andean country hadnot carried out its economic and political integration when it was suspended from the bloc. Thus, its suspension was notthe cause of these problems, but only an aggravating element of these economic and political impacts that mostly arisefrom its internal political and economic crisis and the posture of Brazilian alignment with other countries, to the detrimentof autonomous regional development. In other words, Venezuela's suspension of Mercosur was configured as an interveningvariable in the impacts analyzed.