South America's presidents hold first-ever summit

The 12 heads of state during the opening session of the South American summit in Brasilia, Brazil

BRASILIA, Aug 31 (Reuters) -- South American presidents opened their first-ever summit in Brazil's capital on Thursday pushing for ever closer economic and political unity but wary that an escalating civil war in Colombia will stain the region.

The 12 presidents will sign a "Declaration of Brasilia" on Friday including a pledge to unite South America's two main trade blocs into a single-free trade zone in January 2002 with 340 million consumers.

Brazilian President Fernando Henrique Cardoso said South America has been "severely hurt by the protectionism of wealthier nations."

"It is necessary to unite forces to break the circle of uncertainties from abroad and promote the participation of South American countries in this scenario of globalization," Cardoso said in his keynote speech to open the summit.

At the meeting the presidents are also expected to commit themselves to democracy in a region where threats of military coups and unclean elections loom.

But prompting a much bigger debate was Colombia's launch of a U.S.-backed, $7.5 billion offensive on drugs and rebels after three decades of bloody civil war.

"Plan Colombia" was highlighted by U.S. President Bill Clinton's one-day visit to the Andean nation on Wednesday. He assured Colombians that the $1.3 billion aid for the package did not constitute "Yankee imperialism" or a new Vietnam.

Colombia's President Andres Pastrana applauded Clinton's support. "It was an historic visit, Colombia is not alone, it has the backing of the U.S. and the international community," he said. "We have a common enemy which is the drug trade."

But neighboring countries Brazil, Ecuador, Peru and Venezuela say they are concerned about an escalation of violence as the U.S. bolsters Colombia's military might.

"This could generate a medium-intensity conflict in all of the northern part of South America, not affecting just Colombia," Venezuelan President Hugo Chavez told reporters.

Chavez is one of the most outspoken supporters of a stronger and independent South America, capable of ironing out its own trouble spots and providing a counterweight to U.S. domination in regional trade talks.

On Wednesday, Chavez said the region would be "wiped off the map" if it did not unite before the creation in 2005 of an Americas free-trade area, an endeavor led by the United States.

But it is Brazil, as the region's largest country and one of the world's top emerging economies, that is spearheading the drive toward South American unity after 50 years of lukewarm regional commitments.

Cardoso wants to build a 10-country-strong trade bloc out of Mercosur in the south and the Andean Pact in the north.

Mercosur comprises Argentina, Brazil, Paraguay and Uruguay and associate members Bolivia and Chile, while the Andean Pact countries are Bolivia, Colombia, Ecuador, Peru and Venezuela. Guyana and Surinam do not belong to either bloc.

In spite of disputes stemming from Brazil's 1999 currency devaluation and Argentina's recession, Mercosur has evolved in five years into the world's third largest trade bloc behind the European Union and the North American Free Trade Agreement (NAFTA), formed by the United States, Canada and Mexico.

The Andean Pact, however, has made little headway in its 31-year history and its members' economies are the least developed in the region. Together the groups would have economic output of $1.3 trillion.

"We have to unite to open the possibility that our block ... can have a greater chance of selling our products," Ecuadorean President Gustavo Noboa told Reuters.

But even with a firm commitment to join the northern and southern countries in free trade, the movement of goods through the region still faces daunting geographical obstacles.

The presidents will also make space in their tight agenda to discuss how they can finance the roads, bridges and energy lines to carry products and services over the Andes and through the Amazon forest to their neighbors.

Copyright 2000 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Impact of Colombia's anti-drug campaign key issue at South American Summit
August 30, 2000
Venezuela's Chavez warns Colombia could become another Vietnam
August 30, 2000
Venezuela's chief urges South American integration
August 30, 2000
Brazil says 'Plan Colombia' biggest security risk
August 29, 2000

Presidencia de la Republica de Venezuela (Spanish)
Presidencia de la Republica de Colombia (Spanish)
Mercosur (English/Spanish/Portuguese)
Center for International Policy Latin America Demilitarization Program

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