June 12, 2006

Andean bloc seeks common ground after Chavez split

By Alonso Soto

QUITO, Ecuador (Reuters) - Andean leaders meet this week in
Ecuador to try to salvage their five-nation commerce bloc after
disputes over U.S. free trade agreements revealed deep
political divisions in the region.

Tuesday's meeting in Quito comes after Venezuelan President
Hugo Chavez, a fierce critic of the U.S. government, abandoned
the group, saying free trade deals that Colombia and Peru
reached with Washington had scuttled the bloc known as the
Andean Community.

But foreign ministers from four Andean countries failed on
Monday to agree on a plan to ask the United States to extend
special reduced trade tariffs and find common ground to
negotiate a free trade pact with the European Union, an
official with knowledge of the meeting in Quito told Reuters.

The official, who declined to be named, said fundamental
differences over U.S. trade talks had blocked an agreement.

"Each president will decide on this depending on the
reality of his country," said the official, referring to the
signing of a joint letter to ask the United States for an
extension of the lowered tariff levels.

Foreign ministers and officials had said earlier they were
confident members would reach common ground on several key

"This means the Andean Community is returning to some
normalcy," Allan Wagner, general secretary of the group, told

Trade among the five nations reached $9 billion in 2005.

Allied with U.S. foe Cuba and with Bolivia, Chavez presents
his ideas for socialist revolution as an alternative to free
trade deals with Washington and has urged Colombia and Peru to
rethink their accords with the U.S. government.


Bolivia's government said Chavez would also attend the
Quito meeting, but the presidential press office in Caracas
could not confirm he would visit Ecuador.

Chavez's position put him at odds with Peru's
president-elect, Alan Garcia, who has clashed with the
left-wing former army officer in a dispute that led to both
countries withdrawing their ambassadors.

Luis Fernando Duque, the president of the Andean parliament
that serves as the bloc's legislative body, said the group is
proposing Venezuela rejoin as an associate members in an effort
to maintain regional trade ties.

He added that the bloc is also planning to ask Chile to
rejoin to strengthen the group.

Bolivian President Evo Morales, a Chavez ally, called the
Quito meeting in an attempt to boost integration and to
convince Caracas to return to the group, which was created in

Garcia has also asked Chavez to stay in the group to
strengthen its bargaining power, despite their exchange of
insults during Peru's election campaign. Chavez had openly
backed Garcia's rival, Ollanta Humala, in the election.

Chavez, who says he is battling U.S. imperialism, has
become the magnet for opponents of Washington's trade and
economic proposals for Latin America. His position contrasts
with those of more moderate leftist leaders in Brazil and

U.S. officials also portray Chavez as a threat to regional
stability even though political tensions have not stopped
Venezuela, the world's No. 5 oil exporter, from selling most of
its crude to the U.S. market.

"The bloc still has a chance to survive," said Simon
Pachano, professor at the Ecuador's branch of the Latin
American Faculty of Social Sciences. "I think Chavez is
bluffing and trying to pressure for better conditions for his
country before he decides to return."

(Additional reporting Mario Naranjo and Alexandra Valencia)