Latin leaders in Europe for trade talks

Latin American leaders head for a meeting with the European Union this week amid disputes that threaten some of the Western Hemisphere’s political and trade alliances.

Chile and Mexico have strategic alliances with the European Union already in place, but other Latin American countries have not been able to reach major trade agreements with the EU.

Until recently, many viewed the three-day EU-Latin American summit, which starts on Thursday in Vienna, Austria, as the ideal place to push such initiatives.

But member nations of the Mercosur and Andean Community trade blocs have become bogged down in internal fighting.

“Latin America is not arriving at its best moment,” said Osvaldo Rosales, director of international trade for the UN’s Economic Commission for Latin America and the Caribbean.

Paulo Kramer, of the Political Science Institute of the University of Brasilia in Brazil, agreed.

“They are going divided, without being able to hide the signs of their disintegration,” he said.

Venezuela’s President Hugo Chavez has said his country will drop out of the Andean Community because two member nations, Peru and Colombia, have signed free-trade deals with the US. The trade bloc also includes Ecuador and Bolivia.

Chavez also said on Sunday that his government may drop out of the G3 trade group with Colombia and Mexico, saying it only benefits Mexican companies. The leftist leader has repeatedly sparred with Mexico’s conservative, business-oriented President Vicente Fox.

Uruguay has said it was “useless” to stay in Mercosur, which it founded with Brazil, Argentina and Paraguay, unless the bloc makes reforms. It has been considering a separate deal with the US.

Uruguay also is in a dispute with neighbouring Argentina, which has filed a claim before the International Court of Justice at The Hague to protest the construction of two pulp mills it fears will pollute their river border.

“The recent conflicts reveal how weak these trade blocs are,” said Peter Hakim, president of the Inter-American Dialogue in Washington. “Neither group has been particularly serious about integrating.”

He added that trade blocs “are not going to contribute much to economic or trade growth until the countries are prepared to adopt and enforce a strict set of rules, and have a systematic way to resolve disputes”.

German Foreign Minister Frank-Walter Steinmeier said on Friday that Europeans don’t understand why disputes are fragmenting Latin American trade blocs.

“The signs are not easy to interpret in Europe,” Steinmeier said after meeting with Brazilian Foreign Minister Celso Amorim on Friday, at the end of a two-day visit.

Rosales, of Cepal, said the EU had hoped to see a “solid advance” by the countries toward regional integration but ”unfortunately, that’s not what is happening”.