Mercosur gains two oil supplying nations

A Mercosur summit embraced Venezuela as an associate member and accepted Mexico in principle, gaining two oil suppliers and extending the block to the US border.
Eight heads of state attended the 26th summit. The membership announcements obscured lack of progress on other Mercosur matters during the two-day summit. The group's only concrete agreement was the August 15 roll-out of a dispute resolution mechanism, whose creation had been announced two and a half years ago.

Mercosur includes Argentina, Brazil, Paraguay and Uruguay. Bolivia, Chile and Peru are associate, non-voting members of the South American trade block.
Argentine President Nestor Kirchner hosted Bolivian President Carlos Mesa, Brazilian President Luis Inacio Lula da Silva, Chilean President Ricardo Lagos, Mexican President Vicente Fox, Paraguayan President Nicanor Duarte, Uruguayan President Jorge Batlle and Venezuelan President Hugo Chavez. The final declaration signed by the presidents, all from agricultural exporting countries, called on rich countries to eliminate export subsidies. That issue helped sink World Trade Organization talks in Cancun in September.

Venezuela could access quickly to Mercosur because it is already a member of the Andean Community, which has its own free-trade agreement with Mercosur.
Accession will be more complex for Mexico, which, under Mercosur rules, must offer Mercosur members terms at least as favourable as those it offers any other trade pact. Mexico has a free-trade relationship with the United States and Canada. Until then, Mexico will be invited to all Mercosur meetings.

Lula, whose country will hold the rotating presidency for six months, said during the closing ceremony, "Mercosur enlargement will create a Latin American community of nations, a task that cannot be accomplished overnight. However, our work these last few months will allow us to form an extraordinary bond."
He said he was pleased that after 10 years of negotiations, Mercosur and the Andean Community were on their way to creating a vast free-trade zone of all of the Latin countries in South America.
"That seemed as though it was impossible and drifting away," he said. "By reinforcing the customs union and building a common market foreseen in the Asuncion accord (of 1991), it is fundamental to deepen and broaden Mercosur toward other sectors, such as services and government acquisitions," he said.