Brazil - Brazzil Mag - Brazil and Mercosur Prepare Summit Under Chavez Cloud

Foreign Affairs and Economy ministers from Mercosur met Friday, October 26, in Montevideo, capital of Uruguay, to address asymmetries and non tariff restrictions inside the block, an ongoing issue which has become a source of growing contention between full members, Argentina, Brazil, Paraguay and Uruguay.

The ministers gathering in the framework of the Common Market Council was "extraordinary" and is part of the preparations for the half year summit next December in Montevideo when the Mercosur chair will be handed by Uruguay to Argentina.

"We're a political mechanism and our decisions are then sent to each country member for the normal parliamentary ratification process," said Uruguay's Foreign Affairs minister Reinaldo Gargano.

"Uruguay and Paraguay are very much interested in seeing the internal asymmetries corrected, and this must begin with the elimination of non tariff disturbances," said Gargano who underlined that size and different rate of expansion of the regional economies is at the heart of the matter.

"Uruguay is interested in a Customs code, an end to the double external tariff practice and steps to promote and privilege regional trade," insisted Gargano. "Brazil and Argentina's economies must give us a chance to trade taking into account circumstances and the asymmetries."

Mercosur trade for Brazil represents 5% compared to over 35% both for Uruguay and Paraguay.

Another contentious issue is Venezuela's incorporation to Mercosur as a full member which has been approved by the legislatives of Argentina and Uruguay but has faced opposition in the Brazilian Congress following an exchange of abusive language between President Chavez and Senators.

Last Wednesday a committee in Brazil's lower house of Congress gave its approval to Venezuela's entry, but the proposal from the Foreign Relations Committee still faces two more votes in the Chamber before it goes to the Senate, where an opposition critical of President Chavez holds more power.

Chavez has accused Brazilian legislators of acting on behalf of Washington in delaying Venezuela's request to enter Mercosur. In June, Chavez called Brazilian legislators "parrots" and stooges of the United States for criticizing his closure of an opposition TV station.

In response several congressmen threatened to block Venezuela's Mercosur entry, saying the Chavez government did not meet the trade group's democratic principles.

Brazil and Venezuela share the desire to deepen South American trade ties as a counterbalance to rich country interests but Brazilian President Luiz Inácio Lula da Silva has often distanced himself from Chavez's anti-market and nationalist policies.

Skeptic analysts believe the decision in the Brazilian Congress could take at least 45 days since the Senate is controlled by conservative members who are suspicious of Chavez ambitions to forge a regional alliance against Washington.

So far, the discreet talk in diplomatic circles in Caracas is that there's little sign of Venezuela's entry happening yet. On top of the uncertainty in Brazil, the Congress in the Paraguayan capital, Asuncion, has yet to vote on Venezuela's case.

As a politically equal but economically inferior partner of Mercosur, the Paraguayans are said to dig in their heels from time to time to ensure their presence is felt.

In the meantime, Venezuela will continue to have associate status at Mercosur, with observer rights but little more.