Going regional: Ecuador, Brazil, Venezuela and Bolivia's small businesses set out to tap one another's markets.

Establishing an agreement for government purchases and creating a market for South American products are two big proposals that Ecuadoran President Rafael Correa presented to his colleague, Luiz Inacio Lula da Silva, in his first official visit to Brazil in April. The proposal, which will include Venezuela and Bolivia, is one of many projects aiming to increasingly integrate those and other South American economies.

Such an agreement initially would facilitate business in the trade of goods and services of US$6 billion annually among Ecuador, Brazil, Venezuela and Bolivia, says Ecuador Foreign Minister and Minister of International Trade Maria Fernanda Espinosa. The proposal "fundamentally seeks to insert small and medium enterprises in the great markets of South America and the world, but under conditions of equality," Espinosa says.

One of the key issues in the proposal is that in this chain of business, governments will participate as suppliers of goods and services for public entities such as schools, hospitals and other sectors in these countries. The idea is to establish distribution and supply chains linking governments and consumers.

To get things going, Ecuador and Brazil hosted a business roundtable in Sao Paulo, where more than 100 Ecuadoran small businesses appeared before Brazilian importers to showcase their exportable products.

To illustrate how promising the Brazilian market is, Mauricio Pena, president of the Ecuadoran Federation of Exporters, says that in Brazil there are more than 5,000 government purchasers and some 20,000 suppliers who together move around $5 billion in goods a year. Doing more business in an integrated block of South American countries will be the final test, Pena says. "The biggest challenge for our presidents, especially for Lula and Chavez, is to put into practice their integrationist rhetoric, since both those countries are the ones that bar the import of our products the most," says Pena.

Ecuador will promote 14 items considered to possess the biggest potential in the Brazilian market. Among them are candies and chocolates, broccoli, medicinal herbs, generic pharmaceuticals, paper and balsa wood.

Antonio Luz, commercial attache at the Brazilian Embassy in Ecuador, says the Lula administration is pushing to help South American countries export their products to Brazil.

"We want to teach Ecuadorans how customs works, the export rules, the requirements of the Ministry of Health and Agriculture regarding sanitary norms, so that exporting is not a complicated process," Luz says.

Another objective is to strengthen Brazilian investments in Ecuador and the rest of South America. "We are researching in order to discover in what sectors of small and medium enterprises it would be feasible to inject Brazilian capital," Luz says.

MARIA ELENA VERDEZOTO * QUITO