I've written before on the help that the United States has gotten from Brazilian president Lula Inacio da Silva in dealing with Hugo Chavez. While the United States and Lula's Brazil aren't 'allies,' we've developed a pretty good working relationship based on shared interest. And what do we share an interest in today? Apparently on denying Hugo Chavez admission to Mercosur, where he could turn that Latin American alliance to his own goals:

Mercosur faces its most serious political crisis following the spiraling conflict between Brazil and Venezuelan President Hugo Chavez who publicly announced a three months "ultimatum" for the definitive approval of his country's entry to the main South American trade block.

"We're going to wait until September. We're not going to wait any longer because the congresses of Brazil and Paraguay do not have the political or moral standing to decide our incorporation (to Mercosur). And if they don't, we'll withdraw until new conditions emerge." said Chavez on national radio and television.

Venezuela's final incorporation to Mercosur must still be voted in the legislatives of Brazil and Paraguay, (Argentina and Uruguay have already done so), but following the incident between the Brazilian Senate that questioned the Chavez regime decision not to renew the license of Venezuela's oldest (and opposition) television station which forced it out of the air, the vote has been stalled.

The Brazilian Congress is waiting for a retraction following Chavez' description of them as "United States parrots" and "oligarchs." Brazil's Foreign Affairs minister Celso Amorim suggested a "friendly gesture," but the Venezuelan president replied that it's the Senators who must apologize for having interfered in Venezuelan internal affairs and considered Amorim's suggestions as "impertinent."

You have to give Chavez credit for chutzpah; it takes a bold man to 'withdraw' an application that Brazil and Paraguay have refused to act on. And taken along with Brazil's success at blocking Chavez's goal of an 'OPEC for gas,' and their willingness to sign an ethanol deal with the United States, it's starting to look like Lula and Chavez just don't like each other.

According to Alberto Garrido--a columnist with Venezuelan daily El Universal--the rift between Venezuela and Brazil is real and significant:

Chávez has run into a brick wall in his effort to turn Mercosur into a ''revolutionary'' bloc, and Brazil and Argentina have reached a dead end in their efforts to use the regional trade bloc as a way to mollify Chávez's anti-capitalist, investment-scaring rhetoric. As a result, Venezuela's big plans for an anti-U.S South American alliance are going nowhere, Garrido said.

'What Chávez once called `the Caracas-Brasilia-Buenos Aires strategic axis of South American liberation' is now broken,'' Garrido told me. ``What's left for him to lead is the Bolivarian Alternative of the Americas group made up of Venezuela, Cuba, Bolivia, Ecuador and Nicaragua.''

Brazil might ultimately decide it has invested too much in Venezuela to risk a major breach in their bilateral relationship. But with Venezuela as a full member of Mercosur, it would be much harder to reach trade deals with large, free economies--such as the EU. Whatever the outcome, it looks like Chavez has just about reached the limits of what he can accomplish with economic power. That may be all the more reason to take his military program very seriously.