Montevideo.- South America's two main trade blocs are gearing up for a regional market merger, pushed by their commitment to meet a tight deadline and pulled by the fallout from Brazil's currency crisis.

Nations in the Mercosur and the Andean Community trade blocks are racing to meet a March 31 deadline to hammer out the initial framework that will eventually lead to a South American free trade area.

Negotiators for the Mercosur nations -Argentina, Brazil, Uruguay and Paraguay- are to meet to talks today with their counterparts from the Andean Community nations -Bolivia, Colombia, Ecuador, Peru and Venezuela.

The initial merger talks have stalled repeatedly since 1996.

But Brazil's currency crisis, which has ripped through the whole region since January, has convinced governments that economic integration is the best protection from any large-scale economic crisis. The Brazilian crisis is likely to encourage countries to rapidly negotiate a free trade zone, Andean bloc chief Sebastian Alegrett said on Friday.

Ironically, the devaluation of Brazil's real also makes reaching a free-market agreement easier, negotiators said.

"Increased access to the Brazilian market (resulting from a merger) will compensate for the (higher prices) of the Andean nation products", a senior Mercosur negotiator said.

The latest round of talks here are centred on tariff margins and unilateral barriers for selected products, he said.

Mercosur's regulation took a blow internationally hen it failed to come up with a quick response to Brazil's crisis, the negotiator admitted.

Among the Andean nations, Colombia has resisted closer ties with Mercosur to protect its heavy trade with Venezuela and Peru. In Venezuela, industry and Commerce Minister Gustavo Marquez said his country planned to join Mercosur en bloc with the other Andean nations, contrary to speculation that Venezuela may seed to join unilaterally.

Marquez said the Andean bloc's contribution was likely to be broad, referring to the group's organisational experience of about 30 years.

Chile, a former member of the Andean bloc, is a Mercosur associate along with Bolivia. Chile also has bilateral trade agreements with all the Andean nations except Bolivia.

Two further high-level meetings are scheduled for the next weeks, one in Lima and another here en Montevideo.

Created in January 1995, Mercosur is Latin America's main customs union and the fourth-biggest trade bloc in the world with about 200 million people and a combined economy of more than $ 700bn.

The Andean Community, which date back to 1969, has 105 million inhabitants with an annual economy of $285bn.

Together a South American common market would have about 300 million consumers and an annual economy of about $1,3 trillion. AFP