Winnipeg Free Press - PRINT EDITION

South American trade block signs trade pact with Israel

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MONTEVIDEO, Uruguay - South America's Mercosur trade bloc signed a free trade treaty with Israel on Tuesday and Venezuela sought new momentum for its stalled bid for full membership in the group. The agreement with Israel was the first that the four-country bloc has signed with a country outside the Americas. Leaders said they hope to use it as a model for treaties with other Mideast nations, South Africa and India. The treaty calls for a decade-long phaseout of tariffs on most goods and services and took more than two years to negotiate. Eliyahu Yishai, Israel's commerce and industry minister, signed on behalf of his country. The Mercosur countries - Argentina, Brazil, Uruguay and Paraguay - had about $1.1 billion in trade with Israel last year, with South America exporting farm commodities such as soybeans and beef and importing Israeli software, chemicals, technology and other goods. But no progress was reported on a trade deal with the European Union. South American countries are demanding greater access for their farm goods into heavily subsidized European markets, while EU nations want Mercosur to open more to their industrial and technology services. Venezuela's President Hugo Chavez, meanwhile, renewed his drive to bring his nation into the trade bloc. While the group's leaders have approved the deal, lawmakers in Paraguay and Brazil so far have balked at ratifying Venezuela's entry. Chavez urged the holdouts to consider the benefits his oil-rich country, a major importer of farm and other goods, will bring Mercosur. "The future of Mercosur is bound up in the future of South America," he said, promising that Venezuelan oil would be a resource for his energy hungry neighbours. Despite deep strains in Uruguay's relationship with Argentina, host President Tabare Vazquez led an unexpectedly cordial half-day meeting in which he was handing off Mercosur's rotating six-month presidency to Argentina's Cristina Fernandez. Uruguay and Argentine have been feuding for two years over allegations that a Finnish consortium's wood pulp plant on Uruguay's side of their river border might contaminate Argentina. But Vazquez greeted Fernandez warmly, easing fears the rift would darken the summit mood. The summit leaders, as they have many times in the past, urged an end to internal disputes. "We want greater integration, but we know it's not easy to achieve," Vazquez said. Launched as a customs tariff union in'91, Mercosur has lurched through good and bad economic times amid frequent spats over trade barriers.

Republished from the Winnipeg Free Press print edition December 18, 2007 $sourceSection$sourcePage

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