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South America Breaking News

Thursday, May 30th 2002 - 21:00 UTC
Full article

Some Headlines: Joint naval exercises in Antarctic waters; Drought in Magallanes;
Bi-oceanic route; Mercosur defers decision on tariffs?more.

Mild recession in Brazil

Brazil slid into a mild recession during the beginning of 2002 following the contraction of two consecutives quarters, according to the latest official reports. Last year energy rationing and high interest rates had a direct impact in the building industry, manufacturing and retail sales. In the first quarter the Brazilian economy contracted 0,73% and in the last quarter of 2001, 0,70%. In the same period a year ago Brazil was expanding at a 4,3% rate. Although since last March the nine months long energy crisis was considered over, it was too late to be felt in this year's growth. Besides the Brazilian Central Bank fearing inflation in an election year, has left the basic rate in the range of 18,5%, a level exceptionally high claims the business community. During the first quarter of 2002, energy generation in Brazil contracted 12%; the building industry 8,9%; manufacturing 2% and retail sales 4%. The last recession in Brazil dates from January 99 when the country was forced to devalue its currency 30%.

Mercosur defers decision on tariffs

Mercosur deferred until April 2003 a decision on foreign trade tariffs, according to Brazilian diplomatic sources. An agreement on tariffs is needed before Mercosur, as a block, officially joins the talks for the creation of a Free Trade Association of the Americas. Discussions currently are centered on whether to apply the 14% Mercosur common foreign tariff, or the consolidated World Trade Organization tariff, ranging between a maximum of 29 and 35%. The Brazilian Chamber of Foreign Trade favors the 14% tariff, with a 35% consolidated tariff for all capital goods imports. However the Brazilian Ministry of Foreign Affairs is inclined to apply the consolidated tariff since this will be "a good starting point" for discussions with other blocks, besides helping to protect those areas that are less competitive. The original deadline for a tariff agreement was next October, but given the coincidence with the Brazilian presidential election, an additional six months were granted.

Uribe to meet Bush

Elected Colombian president Alvaro Uribe will be travelling to United States next June to seek United Nations mediation in the armed conflict with the guerrilla forces, to meet with US President George Bush and obtain improved credit conditions for the fragile and indebted Colombian economy. Although there's no official agenda yet, it has been confirmed that President Bush will receive Mr. Uribe in the White House June 20th. During his campaign Mr. Uribe anticipated he would request an extension of the US sponsored and financed "Colombia Plan" to fight the Marxist oriented guerrillas that work closely with the Colombian drug barons. In his congratulation message to the newly elected president, Mr. Bush said that Colombia faced "two evil forces: terrorism and drugs". While in New York Mr. Uribe is scheduled to meet United Nations Secretary General Kofi Annan to discuss the mediation initiative he launched in an attempt to find a peaceful and negotiated solution to the armed conflict with the guerrillas that have at least 20,000 armed servicemen and dominate vast areas of inland Colombian territory. Mr. Uribe on the same victory night surprised everybody by saying he was prepared to resume the peace process with the guerrilla groups, if they ceased all terrorist activities. UN replied that it will "closely examine and with much interest, the proposals" of elected president Uribe. The three years peace talks process sponsored by outgoing president Andrés Pastrana was interrupted last February, and since then the country has been under constant attacks particularly against the country's infrastructure. Another headache for Mr. Uribe is the Colombian economy and growing difficulties to honor the 23,5 billion US dollars foreign debt, most of which matures in the coming fifteen months. "We're going to consider all possible options so the great internal effort of Colombia can be supported with a strong foreign cooperation to face our financial commitments", said Mr. Uribe in Bogotá.

Carmona in Colombia

Pedro Carmona the businessman who briefly occupied Venezuela's presidency during a frustrated coup against constitutional president Hugo Chaves, arrived this Wednesday in Colombia as a political exile. Mr. Carmona arrived in Bogotá accompanied by Colombian Ambassador in Venezuela, Germán Bula, in whose residence he took refuge after a Venezuelan court ordered Mr. Carmona, until then under house arrest, jailed. Apparently Mr. Carmona will be staying a few days in Colombia and then fly to a third country for permanent residency. The asylum extended by Colombian authorities means Mr. Carmona will be able to travel with a Colombian diplomatic passport. After some initial controversy among officials the Venezuelan government finally extended the safe-conduct, although pointing out that Mr. Carmona was not politically persecuted but rather a common culprit accused by Venezuelan Justice of "rebellion" and "power usurpation", when he held the presidential office for a few hours during the institutional crisis of last April. Colombian Minister of Foreign Affairs said Colombia extended asylum in accordance with the Caracas Convention that protects those politically persecuted, but also warned that Colombia was not a haven for those who attempted to depose President Chavez and break constitutional order. Colombian president Andrés Pastrana remarked that he expected the Carmona incident would not affect normal relations since Venezuela is our neighbor and our main trade partner after United States.

Drought in Magallanes

The drought that extended during most of 2001 in the extreme south of Chile had a considerable impact in sheep farming according to reports from the Magallanes Regional Agriculture Office. Even when the number of ovine cattle slaughtered during the 2001 and 2002 season was similar, the difference was particularly evident in the average weight of the lambs. While dressed lambs in the January-March 2001 season averaged 12 to 13 kilos, this year they barely managed 11 kilos, a significant difference. "The lack of rain meant less grass, and poorer food for the flocks, so lambs didn't have a chance to grow as sturdy as in previous seasons", said Mr. Mario Vega, vicepresident of the Ranchers Association of Magallanes. "Magallanes is very sensitive to climatic conditions, we can at the most decrease the number of sheep per acre, but the quality of grass is also a factor", added Mr. Vega. However Mr. Vega also pointed out to the research and pilot experiences to upgrade pastures and grass quality, that have been encouraging but so far haven't proved profitable. "Over the years experience indicates that technical researchers have yet to find a substitute for our local grass "corión", as far as nutrition and resistance conditions are concerned", explained Mr. Vega. "So this also means that, in spite of the increased European Union lamb quotas, we must be moderately optimistic, because abundant food in our fragile environment is still one of are main obstacles".

Joint naval exercises in Antarctic waters

Argentine and Chilean naval officers delegations are holding meetings in both countries planning next season's joint Antarctic exercises. Rear admiral Arutro Ojeda, Commander of the III Naval Zone in Punta Arenas told the local press that as the economy recovers, traffic in Cape Horn and the Magellan strait will increase and it's "our joint duty with our Argentine brothers to closely monitor the area, ensuring safe maritime conditions". The Argentine-Chilean joint search and rescue exercises plus area patrolling extend to Antarctic waters during summer months, when the area registers the greatest concentration of cruise vessels. "The Viekaren joint exercise is scheduled to take place sometime in September. Our people visited Ushuaia last May 25th., when the Argentine national day, and an Argentine delegation will be coming September 18/19 headed by Admiral Alejandro Kenny, Commander of the Austral Naval Area", indicated Rear Admiral Ojeda. The Chilean naval officer also said that this week concludes the First International Maritime Law Symposium, an event held in the framework of the Month of the Sea, together with the University of Magallanes and the participation of academics from Valparaíso University, who specialized in England.

Bi-oceanic route

Brazilian and Chilean delegates, from the public and private sectors, will be participating this week in north Chile of a seminar that will analyze the creation of a bi-oceanic route that would extend from the Atlantic to the Pacific ocean. The route is of particular interest for the land locked states in the center of Brazil eager to have a direct access to Asian markets and the West coast of the United States. The seminar is to be held in Arica, Chile's most northern city next to the Peruvian and Bolivian borders. However both sides are quiet aware of the infrastructure needed and costs involved in opening a route that should also help Chilean exporters access to the Atlantic ocean and increase bilateral trade with Brazil. "Physical integration between north Chile and Brazil must consider many variables, so that we can take the most advantage of this great infrastructure integration effort", said a member of the Chilean delegation, adding that the discussions will include programs of integrated development in areas such as energy, communications, education, health, tourism and commerce in general. The Brazilian delegation to Arica is headed by the president of the Brazilian Senate, Ramez Tebet. Other participants include representatives from multilateral financial organizations such as the Interamerican Development Bank and the Andean Corporation.

Categories: Mercosur.

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