Brazilian President Luiz Inacio ‘Lula’ Da Silva has proposed uniting all countries in South America through the Union of South American Nations (USAN) and shifting away from the U.S. dollar through a standard reference currency for bilateral settlements among countries in the region. Speaking at a summit attended by 11 South American presidents, Lula urged the region to rebuild its integration method to tackle the challenges of ongoing globalization. He reinforced the need for regional integration, stating that no country can face today’s systemic threats alone; only by acting together can they overcome them.
Uniting South America through USAN
Lula suggested rebuilding South American integration mechanisms through USAN, a regional integration institution that was established to organise the different views of South American countries in 2008. Although it has regained relevance with the re-integration of Brazil and Argentina, the organisation is still missing integration from other countries in the region including Chile, Colombia, Ecuador, Paraguay, Peru and Uruguay. Lula urged the region to take advantage of the opportunity to once again walk the path of unity through USAN, stating, “there is no time to lose” and that USAN is a collective good that is still valid and does not need to be started from scratch.
Shifting away from the U.S. Dollar
Lula also proposed implementing a standard reference currency for bilateral settlements among countries in the South American region and avoiding over-reliance on international financial institutions like the International Monetary Fund (IMF). He suggested deepening South American identity in the monetary field through more efficient compensation mechanisms and the creation of a common reference unit for trade, reducing dependence on extra-regional currencies. In January, the governments of Argentina and Brazil discussed a joint effort to issue a South American common currency to settle international transactions between MERCOSUR and BRICS countries. Earlier, Lula had expressed a dream of conducting trade relations in South America with a currency different from the U.S. dollar during a meeting with Venezuelan President Nicolas Maduro in Brasilia.