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Atlantic-Pacific corridor gets green light

Aug. 20, 2010 at 7:02 PM   |   Comments

SANTIAGO, Chile, Aug. 20 (UPI) -- Latin America's answer to the Panama Canal, an overland link connecting the Atlantic and Pacific oceans via Chile, Brazil and Bolivia, may open as early as November, officials said.

The ambitious railroad and highway link between Sao Paulo's Santos port in Brazil and Chile's Pacific ports of Iquique and Arica will pass through Bolivia and span more than 2,600 miles.

Officials described the "bioceanic link" as a flagship project for South America's Mercosur trade bloc, giving the community an edge in regional and international trade.

Mercosur has Argentina, Brazil, Paraguay and Uruguay as full members, Bolivia, Chile, Colombia, Ecuador and Peru as associate members and Venezuela as full member awaiting ratification.

Already the booming economies of South America have prompted the cash-strapped European Union to soften its resistance to closer trade links that its farmers oppose for fear of losing out to cheaper Latin agricultural produce.

European strategists see closer trade links with South America as a lucrative starting point for exploiting new opportunities -- a view echoed in China, other East Asian countries and the Pacific region.

The corridor will transform economies astride both oceans, giving Mercosur senior partner Brazil additional advantages and open new prospects for landlocked Bolivia and Paraguay.

The corridor will be formally inaugurated jointly by the presidents of Chile, Brazil and Bolivia, officials said, adding that agreement for a joint inauguration of the corridor was already in place.

"We agreed with Brazilian President Lula da Silva and Bolivia's Evo Morales to inaugurate next November the 4,000 kilometers link or Oceanic Corridor," Chilean President Sebastian Pinera told reporters.

He said implementation of the corridor project demonstrated how countries that pool efforts "are capable of overcoming divisions from the past and together confront the challenges of the future."

The corridor will be an opportunity for Chile and Bolivia to heal differences going back to the late 1970s. The two countries have no formal diplomatic relations because of lingering differences over terms for providing Bolivia with a seat out. Bolivia lost the vital link -- a mere strip of land -- when it joined Peru in an unsuccessful assault on Chile in the late 19th century.

The corridor follows efforts by Uruguay to provide seafaring opportunities to Bolivia and Paraguay at a planned deepwater port. Uruguay is cobbling together a regional partnership around its planned new port at Rocha as part of President Jose Mujica's strategy to raise at least $1 billion for the project.

The government has promised Bolivia and Paraguay full use of the planned port in return for electricity and gas supplies required to run the facility and an adjoining iron ore mine and extensive rail, air and water links.

Mujica hopes a regional partnership for the deepwater project will be more attractive for prospective investors.

Construction of the deepwater port was considered for a few years before it was set aside in response to the economic downturn. Mujica revived the plan when he took over as president. In recent talks with Bolivia's Morales and Paraguay's ailing President Fernando Lugo, he revived the deepwater port project.

Analysts said Uruguay also saw the planned deepwater port as an opportunity to promote the use of the Magellan Straits as an alternative to the Panama Canal.

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