Published by The Wall Street Journal, US

Rio de Janeiro (Dow Jones)--South American leaders at a summit here Thursday and Friday are slated to push for a further widening of the Mercosur trade bloc.

But political, not economic motives likely lie behind an expansion drive to include Bolivia, and possibly Ecuador, in the customs union. Opening the door to new members with fiercely leftist presidents may be a recipe to wreck what so far has been only a fitful integration effort.

The Common Market of the South now groups Argentina, Brazil, Paraguay, Uruguay and Venezuela as full members. Most other South American nations are associate members.

A recent request by Bolivia to become Mercosur's sixth full member will be "analyzed" during the summit, a Brazilian diplomat told Dow Jones Newswires Wednesday.

It was not clear yet whether Ecuador will also make a formal request to join, the diplomat said. Ecuador's new president, Rafael Correa, had said before his election late last year that he seeks closer ties with Mercosur nations.

"We think we can widen Mercosur's geographical base and at the same time overcome occasional difficulties," the Brazilian diplomat repeated the official government mantra.

Analysts are not so sure a widening would be smooth. Bolivian President Evo Morales and Correa are allies of Venezuela's leftwing populist leader, Hugo Chavez, a fiery anti-American who staunchly opposes orthodox economic policy, favoring instead heavy state control of the economy in what he calls "21st Century Socialism." Mercosur's original members pursue relatively market-friendly policies.

But the economic importance of Bolivia and Ecuador to current Mercosur countries "will be marginal to nil," said Sidney Weintraub, a Latin American scholar at the Center for Strategic and International Studies in Washington. "Neither has much to trade that is not already being sent to Mercosur countries, like Bolivia's (natural) gas to Argentina and Brazil."

Another issue that will be on everyone's mind during the Mercosur summit, but that none will likely raise publicly is the democratic credentials of Chavez' leadership, says Agustin Cornejo, a researcher at the Institute for International Economics in Washington.

"Chavez cannot be judged by his words alone. His actions concerning the opposition television channel raise a legitimate question," he said.

International media watchdogs and the Organization of American States, or OAS, have defended Venezuelan television broadcastor RCTV, which Chavez essentially accuses of treason for its alignment with Venezuela's debilitated opposition.

Cornejo added that once Chavez and Morales are able to team up in Mercosur, their "reckless foreign policy" could further upset already uneasy relations within the group.

Iranian President Mahmoud Ahmadinejad's recent visit to Caracas and Quito raises questions for Brazil, Argentina, Uruguay and Paraguay, all of which have rather cordial relations with Washington. The U.S. has been seeking sanctions against Iran, which it accuses of developing a clandestine nuclear weapons program and fomenting instability in Iraq.

Morales' intention to nationalize the mining sector in Bolivia after formally nationalizing oil and gas last May, and Chavez' announcement last week that his government would nationalize top companies in the telecom and power sectors and assert majority control in the energy sector, could also derail Mercosur's already difficult trade talks with the European Union.

Some original Mercosur members may also be put off by Bolivia's request for exemptions to Mercosur's common external tariff - Bolivia currently applies lower tariffs on imports. Also, Bolivia seeks to enter Mercosur without leaving the faltering Andean Community of Nations, or CAN, which also comprises Ecuador, Peru and Colombia. Chile announced last year that it would rejoin CAN after a 30-year absence.

Eager to bind Bolivia closer to Brazil through Mercosur, Brazilian Foreign Minister Celso Amorim Tuesday reportedly said his country supports an exemption for Bolivia in the tariff issue.

"If Bolivia needs to import food without tariffs to meet the needs of an extremely poor population, that is something to be considered," Brazil's O Globo newspaper quoted Amorim as saying.

That may open a Pandora's box as members, in particular Uruguay, so far have been denied exemptions, says Cornejo from the Institute for International Economics in Washington.

"What will be the implications for Uruguay?" Cornejo said. "Can Mercosur keep a straight face in exceptions to the common external tariff, but say it's not OK for Uruguay and Paraguay to negotiate a bilateral free trade agreement with the U.S., since that would undermine the common tariff?"

Both Uruguay and Paraguay in recent years have complained about "imbalances" in Mercosur that favor the bigger economies of Brazil and Argentina.

U.S. trade officials haven't officially launched free trade negotiations with Uruguay, but they have met with Uruguayan officials to review U.S. free trade agreements signed by other countries and explore some kind of U.S.-Uruguayan deal.

Brazil so far has rejected bilateral free trade agreements of individual Mercosur members as going against the bloc's policies.