MercoPress. South Atlantic News Agency

Mercosur Summit

A Mercosur presidential summit hosted by Argentine president Eduardo Duhalde will be held this Monday in Olivos, Buenos Aires to consider the current political and economic situation of the block.

Presidents from Brazil, Uruguay, Paraguay, Chile and Bolivia will be participating in the meeting that has a long and complicated agenda which includes the recovery of Mercosur's vitality, relations with other trade blocks and the ongoing Argentine situation.

Uruguay's president, Jorge Batlle, is just back from Washington where he had a 45 minutes meeting with President Bush and a round of ministerial talks setting the foundations for a closer bilateral link with United States which has caused concern among other Mercosur members, particularly Brazil.

A common currency, agreements in the automotive industry and a tribunal for trade disputes figure in the more technical agenda of the summit, although technical committees that met in Buenos Aires last week were unable to achieve much progress except for a Brazilian promise to stimulate Argentine auto exports.

However the emphasis will be in expressing full support to the current Argentine authorities and the economic program to get the country out of recession, plus consider a potential spillover if the situation persists.

President Duhalde received a similar expression of support from German Chancellor Schroeder who last week visited Buenos Aires and promised to talk to IMF' Director General.

Argentina in early January devalued its currency and later floated the peso which halved its value triggering inflation after ten years of price stability and a fixed currency pegged one to one to the US dollar.

During the summit Brazil is expected to talk about its intention of a bilateral trade agreement with Mexico, Uruguay will give an account of the Washington trip and Mr. Lagos about Chile's bilateral negotiations with the United States.

Argentine Foreign Affairs Minister Carlos Ruckauf anticipated that the summit will elaborate on a common strategy regarding the Americas Free Trade Association, a strong objective of the Bush administration that has resistance in Congress, and which Mercosur members want conditioned to an opening of the US market to agricultural commodities.