ANDRES OPPENHEIMER S. American community no pipe dream

The chief organizer of 10 South American presidents' plan to announce a European Union-fashioned "Community of South America" on Dec. 9 concedes that the project may be a big gamble. But then, he says, so was the creation of the European Union five decades ago.
Eduardo Duhalde, the former Argentine president who serves as head of the Mercosur Commission -- the trade group made up of Brazil, Argentina, Uruguay and Paraguay -- told me in an interview that the 10 biggest countries of the sub-region will sign the Ayacucho Declaration announcing the foundation of the South American Community at a Dec. 9 ceremony in Peru.
Details of the new institution, such as where it will be headquartered, or whether it will have a bureaucracy like the EU, remain to be worked out. The mechanics of the new entity should come out of another meeting in March or April, he said.
"South America is divided between two big blocs, Mercosur and the Andean Community (made up of Bolivia, Ecuador, Peru, Colombia and Venezuela)," Duhalde said. "Twenty or 30 years ago we were already saying that we had to set the stage for a South American Union, but it was impossible to do it without free trade agreements between South American countries."
Now, with creation of the South American Community, the Mercosur and Andean Community member countries will team up in negotiations with Washington and the EU to reduce agricultural subsidies, take up joint positions in international organizations and eventually achieve full economic integration, he said.
Despite lingering internal problems, such as a territorial dispute between Chile and Bolivia that keeps them from even having diplomatic relations, the two-page draft to be signed by the sub-region's 10 presidents Dec. 9 says participating countries "conceive the South American Community of Nations as a permanent mechanism of political coordination and cultural, economic, social and physical integration."
But aren't South American countries doing the opposite of what Europe did when it started with basic economic agreements before venturing into political ones, I asked. The highly successful 25-country EU was born in 1952 as a European Coal and Steel Community in which six countries pooled their coal and steel resources in a common market.
Mercosur has not been able to sign a free trade deal with Chile or Peru because its external tariffs are much higher than those of either.
'Opposite path'
Duhalde conceded that many experts say an economic agreement should come first. "But we have decided to choose the opposite path, because it is very difficult to solve the issue of lowering external tariffs and become one single (free trade) region," he said.
Wouldn't it make more sense for South American countries to seek free trade agreements with the United States, Europe or Asia, which have much bigger markets for their exports? Southern European countries prospered, in part, because they gained easier export access to their richer European neighbors.
"If you are telling me that farther south of North America there is no Germany or France, that's true," Duhalde said. "But that doesn't mean we shouldn't organize ourselves. ... This is not done against the United States, or against the European Union. This is done to have greater strength, because it is one thing to be sitting alone, individually, and another very different thing to represent the biggest integrated geographic area of the world, of about 17 million square kilometers."
My conclusion: The soon-to-be-launched South American Community may be putting the cart before the horse by starting as a political rather than economic, union.
But if their declaration serves as a stepping stone for economic agreements among themselves and with the world's richest countries, it's a good idea. Yes, it sounds like a pipe dream. But then, the European Union was created by countries that had just been at war with one another, and its initial statements sounded equally -- if not more -- grandiose. Yet, it worked.
X Andres Oppenheimer is a Latin America correspondent for the Miami Herald. Distributed by Knight Ridder/Tribune Information Services