South America on brink of
Business Day, South Africa
February 24, 1999
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.
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
merger talks have stalled
repeatedly since 1996.
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.
devaluation of Brazil's real also
makes reaching a free-market
agreement easier, negotiators said.
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.
round of talks here are centred on
tariff margins and unilateral
barriers for selected products, he
regulation took a blow
internationally hen it failed to
come up with a quick response to
Brazil's crisis, the negotiator
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
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.
high-level meetings are scheduled
for the next weeks, one in Lima
and another here en Montevideo.
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.
Community, which date back to
1969, has 105 million inhabitants
with an annual economy of $285bn.
South American common market would
have about 300 million consumers
and an annual economy of about
$1,3 trillion. AFP