October 29, 2008 (LPAC)--The Finance and Foreign Ministers and Central Bank chiefs of the ten South American nations participating in Mercosur, held an emergency meeting on October 27, 2008 in Brasilia to discuss the global financial crisis. The meeting was held at the insistence of the Argentine government. Foreign Minister Jorge Taiana told reporters that his government had been calling for a new international financial architecture for six years, and reality has proven it right. The IMF is among those responsible for the global crisis, he reiterated.

Held in Brasilia, the meeting went on for three hours longer than planned. "Some countries" believe the crisis is beginning to stabilize, but others believe it will get worse, Brazilian Foreign Minister Celso Amorim reported afterwards. All participants agreed on "the necessity of a profound and all-encompassing reform of the international financial architecture," but no ideas were included as to what that reform should look like, other than including "prudent" regulation of capital markets--a formulation so cautious that even the Chilean lunatic free traders could agree.

A "consensus" was reached on the urgency of increasing regional trade and integration, and activation of the Bank of the South "as soon as possible," as measures to defend the region. The countries also agreed to designate "focal points" in each ministry and central bank to coordinate regional measures in support of local financial markets, production, and jobs.

The open brawl came over an Argentine proposal that Mercosur adopt common protectionist measures against cheap imports flooding the region. Chilean Foreign Minister Alejandro Foxley reacted with fury at the "smell" of changing the system. "The worst thing that could happen would be to use this crisis as an excuse to return to the policies we had in the 1960s, to build an old-style protectionism that generates barriers in our economies and only accentuates the crisis," Foxley told the press.

Brazil's Amorim hedged his bets, however. The Argentine proposal was not adopted, but it might have to be implemented anyway, he said. "On these questions, we have to be very vigilant, because we are in a totally new situation. And it is as if we were in outer space, where we cannot apply the law of gravity as on Earth."