
In related news the Brazilian Senate postponed for a week a full house vote on the incorporation of Venezuela to Mercosur which is pending since March 2007 when the administration of President Lula da Silva sent the request.

Brazil’s all powerful Sao Paulo Federation of Industries, FIESP, said it is willing to yield positions so a free trade agreement can be reached with the European Union but also suggested Brazil should leave Mercosur aside.

The Brazilian opposition announced it will attempt to delay as much as possible the Senate vote on the incorporation of Venezuela to Mercosur which is scheduled to take place Wednesday following the approval by the Foreign Affaire committee last week.

Brazil's Senate foreign relations committee approved on Thursday in a divided vote Venezuela's request to join Mercosur despite concerns over President Hugo Chavez's authoritarian style of government. The vote comes when President Lula da Silva flies to Caracas to sign huge contracts for Brazilian corporations.

Strong lobbying from business interests in Brazil and Venezuela apparently will have tipped the balance and open the way for the Brazilian Congress to include Venezuela in South America’s largest trade block, Mercosur when it takes a vote on Thursday.

Brazilian Central Bank president Henrique Meirelles said the country is considering the gradual elimination of the US dollar in trade with China, Russia and India, which together with Brazil make up the BRIC group.

Ecuador ratified this week support to Mercosur democratic commitment or “democratic clause” which automatically throws out any country member which violates such a commitment.

The president of the Brazilian Senate Jose Sarney reiterated Tuesday he does not support the incorporation of Venezuela to the South American trade block Mercosur, since “decisions from the government of that country represent a crumbling and deviation of democracy”.

It wasn’t an issue during the electoral campaign trail and hardly mentioned in political rallies but Mercosur is high in the agenda of whoever wins next Sunday’s presidential election in Uruguay.

Venezuelan president Hugo Chavez has infuriated Paraguayan congress arguing that with the excuse of Bolivia’s “rearmament” they are conspiring to oust President Fernando Lugo, statements that could further delay Venezuela’s Mercosur incorporation process.