A Mercosur summit embraced Venezuela as an associate member and accepted Mexico in principle on Thursday, gaining two oil suppliers and extending the bloc to the US border.
Eight heads of state attended the 26th Mercosur summit, which closed Thursday.
The membership announcements obscured lack of progress on other Mercosur matters during the two-day summit.
The group's only concrete agreement was the August 15 roll-out of a dispute resolution mechanism, whose creation had been announced two and a half years ago.
Mercosur comprises Argentina, Brazil, Paraguay and Uruguay. Bolivia, Chile and Peru are associate, non-voting members of the South American trade bloc.
Argentine President Nestor Kirchner hosted Bolivian President Carlos Mesa, Brazilian President Luiz Inacio Lula da Silva, Chilean President Ricardo Lagos, Mexican President Vicente Fox, Paraguayan President Nicanor Duarte, Uruguayan President Jorge Batlle and Venezuelan President Hugo Chavez.
The final declaration signed by the presidents, all from agricultural exporting countries, called on rich countries to eliminate export subsidies. That issue helped sink World Trade Organization talks in Cancun in September.
Venezuela could access quickly to Mercosur because it is already a member of the Andean Community, which has its own free-trade agreement with Mercosur.
Accession will be more complex for Mexico, which, under Mercosur rules, must offer Mercosur members terms at least as favorable as those it offers any other trade pact. Mexico has a free-trade relationship with the United States and Canada.
Until then, Mexico will be invited to all Mercosur meetings.
Lula, whose country will hold the rotating presidency for six months, said during the closing ceremony, "Mercosur enlargement will create a Latin American community of nations, a task that cannot be accomplished overnight. However, our work these last few months will allow us to form an extraordinary bond."
He said he was pleased that after 10 years of negotiations, Mercosur and the Andean Community were on their way to creating a vast free-trade zone of all of the Latin countries in South America.
"That seemed as though it was impossible and drifting away," he said.
"By reinforcing the customs union and building a common market foreseen in the Asuncion accord (of 1991), it is fundamental to deepen and broaden Mercosur toward other sectors, such as services and government acquisitions," he said.
Chilean president Lagos said that Mexico's accession would bring South American Mercosur members to the doorstep of the United States.
"Mexico's participation is essential to (Mercosur's) strength," Lagos said.
Lagos added that the regional leaders needed to discuss many other matters, such as health, social justice, poverty and education.
The summit was also a forum to praise Chavez for allowing to go forward a referendum that could oust him from power, as he had promised Venezuelan opposition leaders.
Argentine president Kirchner said, "We are talking about political unity more than about economic unity."
The heads of state agreed as well to welcome applications from Colombia and Ecuador for associate status.
In April, Mercosur signed a free-trade pact with the Andean Community, comprising Bolivia, Colombia, Ecuador, Peru and Venezuela. The agreement did not go into effect last week as planned because of delays in drafting a tariff reduction schedule.
The presidents met in the resort town of Puerto Iguazu, 1,345 kilometers (836 miles) north of Buenos Aires.Agence France Presse:
