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Latin America, Europe seek closer trade ties

Mexican President Enrique Pena Nieto (L) and German Chancellor Angela Merkel chat during the Business Meeting being held in Santiago on January 26, 2013. Leaders of crisis-hit Europe are meeting their counterparts from resource-rich Latin America in Santiago Saturday to press for closer trade ties to spur global growth.

Leaders of crisis-hit Europe are meeting their counterparts from resource-rich Latin America in Santiago Saturday to press for closer trade ties to spur global growth.

Some 61 countries are attending the two-day summit between the European Union and the Community of Latin American and Caribbean States (CELAC, its Spanish-language acronym).

Set up in Caracas in December 2011 at the behest of Venezuelan President Hugo Chavez, CELAC groups all American nations except the United States and Canada and aims to boost regional trade and integration.

Chavez, who is convalescing from cancer surgery in Cuba, will not attend the weekend gathering.

Ahead of the summit, Chilean President Sebastian Pinera met with Brazilian President Dilma Rousseff, who heads Latin America`s dominant power, and separately with German Chancellor Angela Merkel, dubbed "Europe's boss" by the Chilean press.

After witnessing the signing of three bilateral cooperation accords on education, culture and Antarctic research, Rousseff said Brazil and Chile have good prospects for integration, notably in the area of strategic infrastructure.

She specifically pointed to links between Chilean and Brazilian ports.

Merkel, meanwhile, said the EU and CELAC should forge a "strategic alliance between equals."

But she warned that closer cooperation depended on "open markets, free trade and no protectionism."

She said she wanted to discuss with Rousseff how best to move toward sealing a free trade deal between the EU and the South American trading bloc Mercosur.

The EU and Brazil have called for a speedy conclusion of the free trade pact.

Negotiations over the pact have so far stumbled over differences on agriculture -- notably Europe's subsidies to its farmers, which undermine South America's efforts to sell its own products.

The EU is the biggest outside investor in Latin America, contributing three percent of the direct foreign investment in CELAC, worth $385 billion in 2010.

Meanwhile French Prime Minister Jean-Marc Ayrault also called for "deeper and balanced" ties between the EU and CELAC.

Describing Latin America as "one of the engines of world growth," he expressed hope that the two regions will capitalize on their "complementarity."

Other key participants at the summit include Spanish Prime Minister Mariano Rajoy, Cuban leader Raul Castro, presidents Enrique Pena Nieto of Mexico, Cristina Kirchner of Argentina and Jose Mujica of Uruguay, as well as European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso.

Monday, CELAC leaders will hold their own summit here, with Cuba taking over the chairmanship from Chile for one year.

The meeting will seal Cuba's full regional reintegration and mark a major diplomatic coup for President Castro, whose communist-ruled country is still suffering from a crippling 50-year-old US trade embargo.

The 33 CELAC leaders hope to overcome their ideological and economic differences to foster greater regional integration.

"Our efforts (in this area) have not lived up to what is needed and to what Latin America deserves," Pinera conceded.

Meanwhile, a parallel Summit of the Peoples got under way here Friday with a march of 1,000 leftists protesting capitalist economic policies.

The march turned violent when hooded demonstrators tore down traffic lights and shutters from shops in central Santiago, prompting police to intervene with water cannons and tear gas.

At least five protesters were arrested.

The two-day counter-summit brings together representatives of more than 400 social movements from across Latin America and Europe.