Honduras to Dominate Mercosur’s Summit. Brazil Still Refuses to Accept New President

Porfirio Lobo, Honduras' president The Honduras' situation and the dispute over the recognition of just-elected Porfirio Lobo as the Honduran president should dominate the debates at the Mercosur's 38th Summit scheduled for this Tuesday, in Montevideo, the capital of Uruguay.

According to Brazilian officials, the Honduras matter should be the main theme of the meeting the same way it happened in Portugal, last week, during the Ibero-American summit.

Lobo, from the conservative National Party, says he wishes to start a conversation with the administration of Luiz Inácio Lula da Silva, but Brazil's has refused up to now to accept the new president arguing that the election was held in a coup d'état climate.

Uruguay is hosting the bi-annual presidential summit which will also deal with trade differences among its members, particularly Argentina and Brazil, and on the sidelines contacts of Uruguay's president-elect Jose Mujica with leaders from Argentina, Brazil and Paraguay

In the first of the two-day summit Foreign Affairs and Economy ministers, plus central bank presidents from Mercosur full members will address political and technical issues which once drafted are to be presented to the leaders ready for the presidential meeting.

Full members Uruguay's Tabaré Vazquez, Brazil's Lula da Silva, Argentina's Cristina Fernandez de Kirchner and Paraguay's Fernando Lugo and associate member Michelle Bachelet from Chile will be participating in the formal summit beginning Tuesday

But if Colombian President Alvaro Uribe and Venezuela's Hugo Chavez as has been announced effectively arrive in Montevideo, their presence and given the bi-lateral conflict will certainly shadow all other issues.

Chavez has called on the Venezuelan military and people to prepare for war against Colombia. He accuses Uribe of signing an agreement to deploy US forces in Colombian basses with the purpose of attacking Venezuela to control its oil.

For Vazquez and Bachelet it will be their last meeting since Uruguay has a president elect Jose Mujica and the Chilean electorate next Sunday votes for a new president.

And it is president-elect Mujica sideline meetings that have attracted most attention from the Uruguayan press, particularly since he has a good relation with Mrs. Kirchner and there are growing hopes that the three-year pulp mills conflict with Argentina could finally find a viable track.

"We have a difficult, fragile relation with our neighbors but for Uruguay the region is strategic. So we must sit and talk, and talk, and negotiate until we find a way out, that's the only way possible for a reasonable solution. We're not talking of using force to lift the pickets", Mujica has repeatedly stated.

Mujica is also scheduled to meet with Brazil's Lula da Silva, the "model of development" he most admires in the region and "from whom we have many lessons to learn". Besides, Brazil is again Uruguay's main trading partner.

Brazil and Argentina will have their own moments to discuss the non-automatic licensing system which they have imposed on a long list of each other's imports, eroding bilateral trade and which at this stage look more as retaliatory measures.

The two countries a few weeks ago agreed on a negotiations procedure on the issue and an early warnings system for the non automatic licensing, but they have yet to show their effectiveness.

An ongoing issue related to trade and on the agenda is the Mercosur Customs Code which remains stalled because of different macro-economic policies, and which is intended to put an end to the double tariff system imposed on merchandise that comes in through one country member and ends in another.

On the bright side officials from Uruguay, Argentina and Brazil oil corporations will be signing the agreement which will activate exploration for hydrocarbons off-shore Uruguay following a bidding process.

Finally Uruguay will officially hand over to Argentina the six-month rotating chair of the South American trade block.

Bzz/MP

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