BRASILIA (Reuters) - Brazil’s Senate foreign relations committee approved Venezuela’s request to join the South American trade bloc Mercosur yesterday despite concerns over President Hugo Chavez’s thwarting of democracy.

The committee voted 12 to 5 in favour of Venezuela joining the 18-year-old customs union. The proposal must now go to the floor of Brazil’s full Senate, and Paraguay’s parliament must also approve before Venezuela can join.

At stake are tens of billions of dollars in trade and investment with the oil-rich nation and potentially affecting Venezuela’s geopolitical ties to the region.

Denying Venezuela membership could isolate Chavez from South America’s major democracies and push him to deepen ties with distant allies such as Iran, Russia, and China, analysts said.

President Luiz Inacio Lula da Silva, who travelled to Caracas yesterday, lobbied hard for Venezuela joining the group that is made up of Brazil, Argentina, Uruguay and Paraguay. Chile, Bolivia, Peru, Ecuador and Colombia are associate members.

Opposition senators who voted against the proposal said Venezuela did not comply with Mercosur’s democratic principles because Chavez did not respect constitutional rights of opposition politicians and suppressed the media.

Some analysts said Venezuela’s haphazard economic policy, which includes the nationalization of several industries, could further undermine the unity of Mercosur and hamper potential trade negotiations with the European Union and other groups.

“Chavez is rapidly marching toward dictatorship. We are burying Mercosur,” said Senator Arthur Virgilio of the opposition PSDB party.

Mercosur recently signed a trade agreement with Israel, which Chavez has fiercely attacked and accused of genocide against the Palestine people.

Brazil has a trade surplus of around $5 billion a year with Venezuela, with Brazilian contractors holding $20 billion worth of orders for public works projects there.

“I admit Venezuela has problems, internal disputes, but the solution is not isolation,” said Romero Juca, government leader in the Senate.