Brazil Vows More Money and Less Red Tape to Jump-Start Mercosur

Brazil has plans to grant economic and trade aid to Bolivia, Paraguay and Uruguay in an attempt to give South America's main trade grouping Mercosur, "greater cohesion," according to the financial press of São Paulo.

Allegedly Brazilian President Luiz Inácio Lula da Silva instructed his ministers to eliminate bureaucratic hurdles which complicate the access to Brazil of goods from those countries and make extending support to those countries in the framework of Mercosur, "difficult."

The target is to have the package ready for next January 18 when the bi annual presidential summits of the group take place in Rio de Janeiro.

Brazilian Foreign Affairs Secretary Celso Amorim confirmed that with his ministerial team he was coordinating Lula instructions to boost Mercosur and to appease the growing complaints from junior members.

Brazil's president met last Thursday with six ministers and it was agreed to extend a US$ 30 million credit to Bolivia for the purchase of 100 tractors and on request from the Bolivian government, plans for the construction of a biodiesel plant are under consideration.

Regarding Paraguay Brazil's intention is to increase compensations for energy from the huge bi-national hydroelectric plant of Itaipu, although how it will be instrumented still has to be worked out. Brazil and Paraguay are at odds over the price paid for the electricity generated in South America's largest dam, most of which most is consumed by São Paulo' industries.

"There's something sacrosanct about Itaipu, which is a successful bi-national project and that is that the energy not consumed by Paraguay goes to Brazil. That is the essence of the agreement when we decided to build the dam," said Amorim who nevertheless admitted "we must find an adequate compensation for Paraguay and I believe in a solution that does not pinch the Brazilian consumer's pocket."

Lula also instructed for an increase in the number of Customs officials in the border with Uruguay, which has complained that the lack of personnel deliberately slows down the inflow of Uruguayan goods to the Brazilian market.

The Brazilian president specifically ordered that trucks loaded with a famous Uruguayan bottled water, "Salus" be immediately liberated putting an end to alleged sanitary reasons for delaying shipments,
"I want to see Salus water in the Mercosur meeting in Rio de Janeiro," emphasized Lula.

Mercosur junior members Paraguay and Uruguay have bitterly complained that the grouping has become a two members' privileged club, Argentina and Brazil, which decide and act on their own with little regard for the other associates.

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