MercoPress. South Atlantic News Agency

Chile and Argentina closer.

Argentina and Chile's Foreign Affairs ministers said that the free trade agreement Chile will be signing this Friday with the United States will not influence the strengthening of the Mercosur process.

Meeting in Buenos Aires for the first time with Rafael Bielsa, Ms. Soledad Alvear highlighted that Chile's foreign policy "always has had its foundations in the Latinamerican region", adding that Chile "highly values" Mercosur.

Argentina, Brazil, Paraguay and Uruguay are full Mercosur members and Chile and Bolivia associate members.

Ms. Alvear pointed out that Chile is not a full member because the country has lower external tariffs than Mercosur, and Chilean policy targets the full elimination of tariffs.

"Our growth is based in an open economy; foreign trade represents 60% of our economy so that is why foreign markets are so important for us, particularly the agreement to be signed this Friday with United States", stressed Ms. Alvear.

Argentine Foreign Affairs Minister Bielsa said that the Chile-US free trade agreement indicates that "there is a diversity of strategies and they don't necessarily oppose each other".

Mr. Bielsa pointed out that for Argentina after twelve years of confronting Mercosur with the US sponsored Free Trade Association of the Americas, FTAA, "the Chilean free trade agreement is teaching us that one scenario can be temporarily privileged over another, but under no way does this mean opposition".

Ms. Alvear underlined that even when Chile is not fully integrated in trade affairs to Mercosur, it does participate actively in other fundamental fields such as political affairs, defence, education and health.

The two ministers will be meeting again next Sunday in Santiago during the General Assembly of the Organization of American States and on June 17 in Asunción, Paraguay during the mid year Mercosur presidential summit.

Another area of interest for both ministers was bilateral trade and reduction of tariffs. Chile is one of Argentina's main trade partners and in the first four months of 2003 exports surpassed one billion US dollars. Chilean exports are far less significant, 75 million US dollars in the same period, but they experienced a 34% over the first four months of 2002.

Ms. Alvear and Mr. Bielsa also revealed that Argentina and Chile will be holding regular meetings at Economy Minister and Central Bank president level to better coordinate macroeconomic policies.

Nestor Kirchner from Argentina and Ricardo Lagos from Chile are scheduled to hold a presidential meeting at the end of August.