MercoPress. South Atlantic News Agency

Kirchner/Lula address Mercosur fragility

The fragile situation of Mercosur, strengthening bilateral relations, energy and development were in the agenda of the meeting held late Tuesday in Sao Paulo between Argentine president Nestor Kirchner and his Brazilian host Lula da Silva.

Amid references to the coming World Cup in Germany where both Brazil and Argentina are among the favourites, the two presidents concentrated efforts in how to keep the cohesion of the regional bloc which has been under strain following the smaller members' disenchantment with the Argentine-Brazilian entente.

Uruguay has repeatedly stated that Mercosur "as it is" does not fulfill the country's ambitions and President Tabare Vazquez next week will be meeting in the White House with President George Bush when an expanded bilateral trade agreement is expected to be announced.

Furthermore Uruguay has the pulp mills dispute with Argentina which Brazil, following on Argentina's position, considers a bilateral issue.

"So far our position is that the issue must be solved bilaterally", said President Lula da Silva's foreign affairs advisor Marco Aurelio García.

President Vazquez has also unsuccessfully requested on several occasions that the Mercosur Council be convened to deal with the pulp mills dispute and pickets blocking access to Uruguay from Argentina which President Kirchner's administration has tolerated passively.

Argentina until next June 30 chairs Mercosur and refuses to convene the Council which arbitrates in disputes and controversies.

Argentine cabinet chief Alberto Fernandez also present at the Sao Paulo summit added that "everybody is aware that it's a bilateral issue between Uruguay and Argentina", adding that "President Kirchner has ratified The Hague international Court where the case will be presented, since the problem is environmental".

Earlier in Buenos Aires President Kirchner insisted with an environmental impact report saying that if the investment of the pulp mill companies (Botnia and Ence) "is so honest and transparent, why don't they want an environmental impact study?"

But Brazil also has its own problems with the other small Mercosur member, Paraguay.

Both countries share the gigantic Itaipu dam, one of the world's largest hydroelectric projects but Brazil has the dominating position regarding energy volume and cost.

Cash stripped Paraguay would like to have a larger share of the energy produced and a sharp review of energy prices, which Brazil rejects.

Paraguay therefore is also leaning closer to United States not only in trade and investment, but also regarding military and security affairs, an issue which is becoming increasingly irritating for Brazil that considers the area its own turf.

On Tuesday morning President Lula da Silva also hosted but in Brasilia, Colombian President Alvaro Uribe who requested Brazilian mediation in the conflict with Venezuela, which has pulled out from the Andean Community of Nations.

Speaking to reporters after talks with Lula, the Colombian said he asked Brazil's president to relay to Venezuela's Hugo Chavez an invitation to put aside "ideological dogmatisms" and frankly discuss the impact on the Andean bloc of the free-trade accord Colombia signed with the United States.

Chavez last week pulled Venezuela out of CAN, claiming Peru and Colombia's bilateral trade agreements with Washington. CAN member Ecuador is also negotiating a similar accord with the United States.

President Chavez argued that the bilateral agreements effectively killed CAN and surrendered the bloc "to the empire," his usual term for the United States. He said Venezuela will now be fully involved with Mercosur.

Colombia's Uribe said he spoke "from the heart" with Lula and that the two leaders concluded that Bogotá's treaty with Washington in no way harms regional blocs such as the CAN or Mercosur.

This Wednesday in Sao Paulo Luiz Inácio Lula da Silva and Néstor Kirchner will be joined by the president of Venezuela, Hugo Chavez. They will discuss a gas pipeline project that would link all three countries and cooperation in the military industrial sector. Regional disputes and fragilities will obviously be paramount in the agenda.