MercoPress. South Atlantic News Agency

Crucial Mercosur-CAN summit.

Mercosur and Andean Community Foreign Affairs Ministers will be holding a crucial meeting this Monday in Montevideo in an attempt to conclude a common free trade area between the two regional blocks by December 31.

Five years since negotiations began and three since abandoning the self imposed target of December 2000, the two blocks last April in Buenos Aires committed themselves to a new timetable in spite of the region's financial problems and economic diversity.

In the last few years CAN exports, (Bolivia, Colombia, Ecuador, Peru and Venezuela) to Mercosur have consistently dropped between 2001 and 2002 from 1,8 to 1,3 billion US dollars. Mercosur sales to CAN in the same period experienced a modest growth of 3,3% and now stand at 3,96 billion US dollars.

However contrary to what happened in Mercosur following the 1999 Brazilian devaluation and Argentina's 2001 collapse, inter regional trade receded 33,5%, while trade among CAN partners only decreased 5%.

The meeting takes place eleven days before a regional summit in Asunción when the newly elected Paraguayan president Nicanor Duarte takes office August 15 and presidents will want to make an official announcement.

From Lima, Peru, Guillermo Fernandez Soto CAN chairman anticipated the Foreign Secretaries are expected to reach a compromise on a route map leading to December 03, as was agreed in the CAN presidential summit of last June.

Both Mercosur and CAN need at least a "tentative" understanding to help them with the coming rounds of the United States sponsored Free Trade of the Americas Association that has targeted a free trade area extending from Alaska to Tierra del Fuego.

Besides the political convergence of Brazil and Argentina's foreign policies since both new administrations took office, has given Mercosur an additional thrust plus the acceptance of the Brazilian proposal of a Regional Integration of South America, IRSA to encompass the whole continent. An initiative that has been accepted by the Foreign Secretaries of the nine countries involved in the talks.