Toward a New Union in South America?

Peru's Garcia cozies up to Ecuador, Venezuela

By Tamy Higa and Edison Lopez

As South American leaders explored a continent-wide political union, Peruvian President Alan Garcia kept the good vibrations going by making nice with leaders of Venezuela and Ecuador.
At a summit in Bolivia on Saturday, Garcia, who won a runoff in June, embraced and shook hands with Venezuelan President Hugo Chavez — who several month ago he had called a "historic loser" with "psychological problems."

Their row started in April, when Chavez called Garcia a thief, liar and lapdog of Washington, openly endorsed Garcia's campaign opponent, Ollanta Humala. Chavez later suggested that Garcia's victory was due to fraud. Garcia in return accused Chavez of using Venezuela's immense oil wealth to buy influence across Latin America. The exchange prompted the two South American countries to recall their respective ambassadors.

But on Saturday the two were positively chummy. "The two of us are well-mannered and cordial people, so any kind of argument, any previously made statements, remain a closed chapter," Garcia told Peru's Radioprogramas from Cochabamba, Bolivia, where the second South American Community of Nations summit was held. He said that he felt "good chemistry" with Chavez.

Later the same day in Peru, Ecuador's President-elect Rafael Correa, speaking to reporters at the presidential palace where he met with Garcia, said his country's relations with Peru were at their best ever. The 1995 border war between the Ecuador and Peru over their Amazon boundary appeared a fading memory.

"Ecuadorean-Peruvian relations are at their best moment in history, but we still have a lot to do," Correa said before dining with Garcia. "We are here to build not only peace but brotherhood between Ecuador, Peru and all Latin American peoples."

Both presidents had just come from the Bolivia summit, where leaders from around the region talked about creating a South American community similar to the European Union. Correa, who won Ecuador's presidency in a runoff Nov. 26, said Peru and Ecuador must work to mend wounds caused by the long-running border dispute, which was ended with an October 1998 treaty.

"We've achieved the absence of war, but we haven't achieved peace," Correa said, adding that Ecuador's border areas have been and devastated since Ecuador adopted the U.S. dollar as its currency.

On Sunday, Correa said he will not sign a bilateral free trade agreement with the United States, saying it could create "incalculable" damage for Ecuador since the country cannot control its currency's value.

"We don't have a national currency, we have the dollar," he told Radioprogramas. "If as a result of the agreement, Peru and Colombia have a problem in the external sector, they reduce the currency's value and correct the imbalance. Ecuador can't do that, and the consequences could be incalculable."

While critical of the decision in 2000 to adopt the dollar to halt hyperinflation, Correa, who takes office Jan. 15, has reassured Ecuadoreans that he intends to maintain the dollar as Ecuador's official currency for the next four years.

Bolivian President Evo Morales and Chilean President Michelle Bachelet also used the summit to further diplomatic ties between their countries, strained ever since Chile seized Bolivia's Pacific coast during an 1879 war.

The two presidents met in a closed-door session Saturday to continue recent discussions over Bolivia's demand for maritime access. No agreements were announced, but afterward Morales happily cited recent opinion surveys showing that both nations' citizens were warming to their historical rival.

Published by Associated Press writers Tamy Higa in Lima, Peru, and Edison Lopez in Cochabamba, Bolivia, on 9 December