MercoPress. South Atlantic News Agency

Uruguay hosts Mercosur leaders and Russia's Putin Dec. 17

Mercosur headquater in Montevideo

When the leaders of the countries in the Mercosur economic alliance meet in the Uruguay capital, it's likely President Vladimir Putin will be joining them to mark the 150th anniversary of diplomatic relations between Russia and Uruguay. Putin's attendance could draw Venezuelan President Hugo Chavez to the summit

Once Putin's attendance is confirmed, Chavez will need to decide if his growing arms and oil links with Russia merit setting aside his reported irritation with Mercosur to attend the summit. The ratification of Venezuela as a full member of the bloc and its inauguration awaits resolution of several disputes with Chavez. He has come under fire within the organization for the pace of trade reform in Venezuela, for his punishment of opposition TV channel RCTV and his moves to nationalize his country's oil resources. He absented himself from the Jun 2007 Mercosur summit. The official explanation was that his visit to Iran, Russia and Belarus, conflicted with the summit, but some say the Mercosur criticism irked him and prompted his staying away. The leaders might again tackle the alleged asymmetries of Mercosur. Paraguay and Uruguay complain that Mercosur has become a "two members club" of Argentina and Brazil, with decisions limited to the senior partners. Making the point, Argentina and Brazil are discussing a pilot project for trading in local currency and the official creation of the Bank of the South. In December the leaders are likely to want to stay clear of issues that could bring the summit to an early close. One is a fight between Argentina and neighboring Uruguay over pulp mills, which has moved to the International Court of Justice in the Hague. A second front opened on 1 May when the Bolivian president, Evo Morales, nationalised the country's gas reserves to the detriment of Brazil's Petrobras, which controlled around 40 per cent of Bolivia's gasfields. Uruguay currently holds the six-month rotating presidency of Mercosur (Mercado Comun del Sur), which was established in 1991. Its full members are Argentina, Brazil, Paraguay and Uruguay. Chile, Bolivia, Peru, Ecuador, Colombia and Venezuela are associate members. Mexico has expressed an interest in joining. The four member states' zone of free trade has no customs duties or other limitations on 90 percent of the commodities; common tariffs on 85 percent of the imported goods are coordinated. The alliance makes up Latin America's largest integrated market, with over 45 per cent of its population, or over 200 million people. Mercosur as a group has ongoing trade and cooperation negotiations with the European Union, and less advanced with China, India, and South Africa.