Brazil's president Luiz Inacio Lula da Silva admitted Friday the existence of problems between Brasilia and Caracas, although he downplayed the tone of the dispute with his Venezuelan counterpart Hugo Chavez, whom he called my friend.

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Argentine president Nestor Kirchner called Thursday on his Brazilian counterpart Lula da Silva to help smooth the way so Venezuela can become an active member of Mercosur.
Mercosur faces its most serious political crisis following the spiraling conflict between Brazil and Venezuelan President Hugo Chavez who publicly announced a three months ultimatum for the definitive approval of his country's entry to the main South American trade block.
Brazilian president Luiz Inacio Lula da Silva said he was looking forward to talk with his Venezuelan counterpart Hugo Chavez to discuss the latest Mercosur misunderstandings but he also emphasized that there are rules to become a member of the trade group, but none to leave.

Mercosur presidential summit in Paraguay approved Friday steps to speed cross-border shipments of meat and vegetables on Friday, but postponed action on other key issues amid calls for greater unity.

The main ethanol lobby in United States, Renewable Fuels Association, RFA, said that the growing demand for renewable fuel based on corn is not responsible for the recent increase in milk and dairy products worldwide.

Venezuela may need to apologize to Brazil's Congress if it wants to join Mercosur cautioned Brazil's Foreign Affairs minister Celso Amorim in an interview published Thursday in the capital Brasilia.

Mercosur Foreign Affairs and Finance ministers met Thursday in Paraguay ahead of the presidential summit scheduled for Friday when the trade block's six months rotating presidency will pass from Paraguay to Uruguay.

Several Brazilian industry organizations are strongly lobbying Congress and President Lula da Silva to stop the incorporation of Venezuela to Mercosur, on the terms originally agreed, according to Valor, a publication which usually reflects the interests of the industrial sector.