Brazil seeking a strong South American trade bloc

RIO DE JANEIRO, Brazil - An ambitious dream to bind South America's economies together with transport and communication networks - something that could take up to $100 billion and at least 10 years to accomplish - is expected to dominate the first continent-wide presidential summit this week in Brazil.

The two-day summit, which starts Thursday, will bring together South America's 12 chiefs-of-state in Brasilia, where they will discuss building a network of highways, railroads, bridges and river transportation and telecommunications systems as a means to spur the region's economic integration.

Brazilian officials have said they hope funding for the plans will come from multilateral lenders like the World Bank and the Inter-American Development Bank, private investors and individual countries.

''South America is a perfectly lined up geographical area, with a very clear individuality. It is almost an island,'' Brazilian Foreign Minister Luiz Felipe Lampreia told reporters in explaining why the meeting will not involve other Latin American nations.

Some observers believe Brazil - which alone represents half South America's population of 337 million and half its gross domestic product of $1.3 billion - convened the meeting as a way to reaffirm its leadership in the region.

Mexico, which holds strong links with the rest of Latin America but is geographically in North America and already part of NAFTA, along with the United States and Canada, will have an observer at the meeting. Inviting an observer was a concession to President-elect Vicente Fox, who said Mexico felt ''a bit jealous'' being excluded.

The meeting, which will also discuss democracy, education, technology and drugs, will convene just hours after President Clinton's visit to Colombia, where he will reaffirm the U.S. commitment to President Andres Pastrana's anti-drug plan, known as Plan Colombia.

At the summit, Pastrana is expected to brief his colleagues on the operation, scheduled to be kicked off on Wednesday.

The U.S. is providing $1.3 billion, mostly in military aid, to the two-year plan, aimed at combating drug trafficking and forcing leftist guerrillas to negotiate a peace agreement with the Colombian government.

Brazil has reportedly been beefing up police and military forces along its sparsely populated 960-mile Amazon border with Colombia to discourage fleeing guerrillas and drug traffickers from entering Brazilian territory.

The presidents are also expected to discuss the U.S.-sponsored Free Trade Area of the Americas, a hemispheric-wide free trade zone, scheduled to be in place by 2005.

The FTAA would include 34 countries from the Arctic to Argentina, with 800 million consumers in nations with a combined gross domestic product exceeding $10 trillion, making it the largest trade bloc on earth.

While the United States would like to see the FTAA fully operative by 2005, Brazil prefers to move at a slower pace to give regional trade blocs enough time to solidify and merge into a South American-wide bloc capable of competing on a hemispheric scale.

South America's two main trade blocs are Mercosur (Brazil, Argentina, Uruguay and Paraguay, with Chile and Bolivia as associate members) and the Andean pact (Venezuela, Colombia, Ecuador, Peru and Bolivia). All together, plus Guyana and Suriname, represent a gross domestic product of $1.35 billion.


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