Venezuela's President Hugo Chavez says his country is withdrawing from the South American trade bloc, the Andean Community of Nations.
Evo Morales of Bolivia and Hugo Chavez, right, are socialist allies
He told a summit in Paraguay that Venezuela was leaving because recent trade deals between Peru, Colombia and the US had killed off the community.
He has accused fellow members of being overly aligned with the US.
He has vowed to create economic and political unity in South America without the help of Washington.
Mr Chavez has maintained a war of words with Washington, and argued that free trade deals are unfair to developing nations.
On Wednesday the Venezuelan leader told reporters at the summit in Asuncion that the Andean Community of Nations - made up of Bolivia, Colombia, Ecuador and Peru - was "fatally wounded" and only served international elites.
Venezuela, however, is on track to becoming a full member of Mercosur, another South American trade bloc whose member governments are mostly left-wing.
The BBC's Greg Morsbach in Caracas says there are other projects under way to drive forward integration.
Bolivia's President Evo Morales has agreed to buy a 5% stake in the Latin American public news channel Telesur, which is jointly owned by Venezuela, Cuba, Argentina and Uruguay.