SOUTH AMERICA:
Less Asymmetry, More Social Development in Mercosur
Marcela Valente

CÓRDOBA, Argentina,  (IPS) - With calls for solidarity with the bloc's smaller countries and a greater commitment to social development still ringing in the air, the 30th Mercosur (Southern Common Market) summit drew to a close Friday in Argentina.

"Solidarity must guide our actions," Argentine President Néstor Kirchner announced in the host city of Córdoba, addressing Luiz Inácio Lula da Silva (Brazil), Nicanor Duarte (Paraguay), Tabaré Vázquez (Uruguay) and Hugo Chávez (Venezuela) -- the leaders of Mercosur's full members.

"Some countries have greater strengths and others have smaller economies; without solidarity, consolidating Mercosur becomes even more difficult," he added.

Lula, who at the meeting assumed the rotating six-month presidency of the bloc, taking over from Argentina, backed this move towards solidarity when he said he was certain "a redesigned pact would enable more equitable development of the smallest economies, to the benefit of all."

Complaints about the skewed nature of the bloc voiced by the smallest members, Paraguay and Uruguay, resonated with leaders and became a key summit issue.

"We are not looking for charity," declared Duarte, because charity is "people giving away the extra bits they don't need -- we want to share in what people haveàthat is true solidarity."

The event kicked off Thursday night with Kirchner's arrival in Córdoba, one of Argentina's largest cities, followed by a banquet for the visitors, including Chávez, in Venezuela's Mercosur summit debut as a full voting member.

Also present were presidents Evo Morales (Bolivia) and Michelle Bachelet (Chile), two of the bloc's associate members, as well as Fidel Castro (Cuba).

Issues related to the bloc's asymmetry monopolised much of the debate this week in preliminary meetings of economy and foreign affairs ministers. Although substantial proposals were tabled, representatives from Paraguay and Uruguay sought more concrete developments.

Argentina's Economy Minister Felisa Miceli brought in a draft proposal for a Mercosur Development Bank, which would enable the bloc's member countries to maintain greater financial independence from the multilateral lending institutions, and measurable progress was made on the creation of a 100-million-dollar Structural Fund for the smallest countries.

Uruguay, however, said it no longer had any faith in promises and called for action. In contrast, the Paraguayan leader, while underscoring the urgency of equitable development, expressed hope in the "new awareness" that was growing in the bloc.

Larger states bristled at the request set forth by Uruguayan Economy Minister Danilo Astori to allow Mercosur members to pursue trade agreements with non-bloc economies.

But Alfredo Chiaradía, Argentina's national Mercosur coordinator, was open to the possibility of Uruguay establishing preferential tariff agreements with other countries, provided they are not detrimental to other members of the bloc.

During his speech at the leader's plenary meeting, Vázquez brought up Uruguay's dispute with the Argentine government over the construction of two paper pulp mills on the east bank of the Uruguay River, which serves as a natural border between the two countries.

"The Uruguay River should unite, not separate us," Vázquez said in a conciliatory tone, under Kirchner's close gaze.

"We must try to understand each other's position," he declared, and later asked for "the benefit of the doubt," referring to pulp mill pollution fears raised by Buenos Aires and residents of the Argentine town of Gualeguaychú, located relatively near both plants.

The presidents also emphasised their view that the bloc should take a greater focus on social questions. President Bachelet said she was pleased with "the incorporation of the social agenda" in the trade alliance's central concerns.

For his part, Duarte said "people are tired of empty rhetoric," but added that he perceived a "greater awareness (in the bloc) of the poverty" suffered by millions in Latin America.

Morales also called for higher priority to be put on addressing social problems. "Mercosur must provide solutions to the victims of an economic model oriented towards plundering our natural resources," he remarked, referring to the free-market neoliberal polices implemented in the region in the 1990s and to decades of extraction of oil, natural gas and minerals by transnational corporations.

He also said he had been the target of "threats" and "blackmail" due to his decision to re-nationalise Bolivia's energy reserves, and called on the state-owned oil companies in Mercosur countries, like Brazil's Petrobras, Energía Argentina Sociedad Anónima and Petróleos de Venezuela (PDVSA), to help certify his country's natural gas reserves.

The leader said that after his Mar. 1 announcement that public control would be reasserted over Bolivia's energy reserves, foreign oil companies began to drastically downgrade their proven reserves in Bolivia.

Lula, meanwhile, mentioned Bolivia as the country that might be next in line to become a full member of the Mercosur trade alliance.

"Don't expect me to fight with Morales," said Lula, responding to journalists who asked him about relations between the two countries since Bolivia re-nationalised its reserves, directly affecting Petrobras, which has the largest investments in Bolivia's energy industry.

The Brazilian president was referring to issues like the pending discussion on the price of imports of natural gas from Bolivia.

Bolivia had already renegotiated with Argentina, hiking the price of its gas exports to that country by 56 percent.

Bachelet met at the summit with Kirchner to discuss, in turn, the increase in the price of the fuel that Argentina sells to Chile. But the Chilean leader downplayed the tension over the issue, merely stating that "All we are asking for is a bit more warning."

However, natural gas was also a unifying factor at the summit, as Bolivia, Paraguay and Uruguay joined Venezuela, Argentina and Brazil in an energy integration project involving the construction of a mega-pipeline that will transport gas 8,000 kilometres, from Venezuela's Caribbean coast all the way south to the River Plate (the estuary separating Argentina and Uruguay).

In their final declaration, the presidents expressed their satisfaction with the creation of a Mercosur parliament, which is to begin operating by year-end in Montevideo, Uruguay. The parliament, which will function with 18 lawmakers for each member country, elected by their respective legislatures, "will be a watershed in the consolidation of the integration process," they stated.

In addition, the leaders congratulated themselves on the idea to hold the first parallel gathering of Mercosur social organisations this week, and proposed doing so at every future summit. "Social participation is central to deepening the integration process," they said in the final declaration.

Progress was also made in agreements with the Mercosur associate members: Bolivia, Chile, Colombia, Ecuador and Peru. Furthermore, the member countries reaffirmed their support for the fledgling South American Community of Nations, "based on integration among preexisting blocs."

They were referring obliquely to the crisis faced by the Andean Community trade bloc, made up of Bolivia, Colombia, Ecuador and Peru since Venezuela's recent withdrawal in protest over the signing of free trade accords with the United States by Colombia and Peru.

The leaders also signed trade agreements with Cuba and Pakistan, and agreed to continue negotiating a deal with Israel.

Lula, in the meantime, said that in the region, "no one is talking anymore about the FTAA (Free Trade Area of the Americas)," the U.S.-driven initiative that has fallen into disgrace.

"Whoever wants to talk about the FTAA has to first talk about Mercosur," he said. "We want our economies to be respected, and we will defend our interests."

The president of the Commission of Permanent Representatives of Mercosur, Carlos "Chacho" Álvarez, said the region is facing "an exceptional situation" after the admission of Venezuela to the trade alliance.

"Above and beyond specific differences, there are presidents today in the region who share a common vision and common ideas, and if the integration process is basically a political construction, we have the conditions needed to move forward," he said, taking an upbeat view.