July 20, 2006

Chavez, Castro may push Mercosur meeting leftward

By Hilary Burke

CORDOBA, Argentina (Reuters) - Venezuelan President Hugo
Chavez marked his nation's debut as a member of South America's
biggest trade bloc on Thursday at a two-day summit that also
drew his friend, Cuban leader Fidel Castro.

Venezuela formally became the fifth full member of Mercosur
this month, as the bloc grapples with heated disputes among
some member countries.

Chavez, a self-described leftist revolutionary flush with
crude oil revenue and a close Castro ally, has a combative
relationship with the U.S. government that contrasts with other
Mercosur leaders whose ties range from cordial to friendly.

Chavez has promoted Mercosur as an alliance to counter
U.S.-backed free-trade deals being promoted by Washington in
the region. Castro, in a rare appearance abroad, was traveling
to Cordoba to sign Cuba's biggest trade agreement with the

"Here in Cordoba, today and tomorrow, a new Mercosur will
be born," Chavez said after arriving in this central Argentine
city, some 435 miles northwest of Buenos Aires.

"This will be a relaunching of Mercosur," he added.

Analysts say Venezuela's incorporation could increase
tensions in a group struggling to find common economic ground.
Full Mercosur members also include Argentina, Brazil, Paraguay
and Uruguay. Bolivia and Chile are associate members.

"We'll have to see if in fact these countries will speak
the same language or if each one will try to play its own
game," said Norberto Consani, an international relations expert
at Argentina's Universidad Nacional de la Plata.

Argentina and Chile have clashed recently over energy
supplies while Bolivia and Brazil have struggled to resolve
differences over natural gas prices. Argentina and Uruguay have
also been embroiled in a dispute over the construction of two
paper mills along a river shared by the two countries.


Castro, wearing his trademark olive military uniform,
arrived in Cordoba on Thursday evening.

On Friday, the presidents were expected to sign a trade
agreement with Cuba reducing and eliminating tariffs on a host
of Mercosur exports to the communist-ruled island nation.

An appearance by Castro could be seen as an attempt to push
Mercosur further left. But moderates like Chilean President
Michelle Bachelet, Uruguay's Tabare Vazquez and even Brazil's
Luiz Inacio Lula da Silva may resist, as could Paraguay's
center-right leader Nicanor Duarte Frutos.

"I don't know if Fidel's presence would be viewed so well
by other presidents, maybe by Chavez and (Bolivia's leftist)
Evo Morales, but I'm not sure about the rest," Consani said.

Chavez, Morales and Castro are expected to lead a rally by
university students and political activists after the Mercosur
summit ends on Friday.

Argentine officials insisted Mercosur was capable of
transcending any ideological differences and bilateral

"Integration is not ideological," said Carlos Alvarez,
president of the commission of permanent representatives to

Trade among the bloc's members nearly doubled between 2002
and 2005 to $39 billion, but is still just shy of 1998 levels.
Alejandro Mayoral, an international trade analyst, said many
Mercosur nations compete rather than complement one another,
particularly on commodities.

(Additional reporting by Cesar Illiano and Damian