MercoPress. South Atlantic News Agency

Chile/Argentina strategic alliance running out of gas

Chilean president Michelle Bachelet received a second piece of unwelcome news from Buenos Aires on Wednesday when the Argentine government published a resolution allowing gasoline stations along the border to levy a surcharge to vehicles with foreign number plates.

After an emergency meeting with four key ministers, Bachelet told reporters, "We are trying to advance towards greater integration across the board - in commerce, tourism, transport, human mobility. In this context, this measure isn't comprehensible; it doesn't appear congruent with the aim of greater integration."

Bachelet went on to say she would raise the discriminatory pricing issue - which will also affect Brazilian, Uruguayan, Paraguayan and Bolivian cross border motorists ? at the Mercosur presidential summit in Cordoba, Argentina on July 20. Chile is an associate member of the trade bloc, but doesn't have voting rights.

The move comes less than a week after Buenos Aires said it would increase the price of the natural gas it exports to Chile. Argentina had previously agreed a pay more for the gas it imports from Bolivia after La Paz nationalized the country's gas industry in May. Analysts say Argentina is simply passing the increased bill from Bolivian gas on to Chile in order to avoid raising domestic energy prices.

A Chilean delegation, in Buenos Airs last Friday to discuss the issue, was forced to accept the revised gas prices with a pinch of salt after being told by the Argentine Planning Minister, Julio De Vido, that Argentina "has nothing to negotiate with Chile".

What appears to have particularly niggled the Chilean government is that the delegation was not informed of the forthcoming decision to charge foreign motorists more at Argentine petrol pumps. With opposition rightist political parties already accusing Bachelet of not standing up for Chile's interests, and pouring scorn on her plans for a Chilean Argentine ?strategic alliance,' it looks likely that Santiago will take a firm stand on the proposed petrol surcharge.

On Wednesday the President of the Chilean Chamber of Deputies, Dep. Antonio Leal, contacted his Argentine counterpart, Alberto Balestrini, to discuss both the hike in gas prices and the petrol surcharge. Leal described the surcharge as "discriminatory," adding, "It's bad for tourism in both countries and bad for hundreds of truckers and transport companies that carry freight between Chile and Argentina."

After a wave of protest from across Chile's political class, the Argentine government broke its silence on the matter. Badgered by journalists, Julio De Vido said, "We will not change position due to comments from third parties. We simply take the decisions the country needs, fundamentally within the frameworks agreed with other countries." He refused to make further comment.

The rightist Chilean daily La Tercera gave extensive coverage to the story with a front page banner headline reading "Bachelet criticizes Argentina and will take the petrol price hike to Mercosur".

The paper's editorial casts doubt on the viability of Bachelet's call for a strategic alliance. "A strategic alliance implies common interests, values and objectives that have not been evident in recent bilateral relations," read the lead. "It also implies that the parties benefit in more or less equal measure and that they lose more canceling the alliance than maintaining it ? it's fair to ask if the strategic alliance really exists."

The conservative broadsheet El Mercurio ran a headline on the impact of higher gas bills for Chilean industry, but gave less prominence to the issue of discriminatory petrol pricing. A roundup in the inside pages reported that "the Argentine government justified the measure pointing to the high demand for petrol along the border due to the low prices ? almost 40% lower than in Brazil and Chile."

The pro-government La Nación presented the rightwing opposition as trying to stir up trouble between Bachelet and the Argentine leader, Nestor Kirchner. The pair are said to have a good rapport. Under a title that read "Opposition plays the nationalist card in reaction to Kirchner's measure," La Nación quoted Hernán Larraín, the leader of the far right UDI, saying: "We demand that the government once and for all ?puts its trousers on' (an evidently macho term meaning ?stands up for itself') and tells the Argentine government what it is going to do."

The Argentine papers hardly covered the issue. A short piece in Buenos Aires La Nación reported that many petrol station owners were not in agreement with the policy. Clarin also ran a short article reporting Bachelet's protest at the measure.

Analysis by Justin Vogler (Santiago Times).