Dec. 8 (Bloomberg) -- Venezuelan President Hugo Chavez called on South American leaders meeting in Bolivia to go beyond talks on energy, trade roads and ports, and take steps to create a formal political and economic confederation to fight the U.S.

``Only together will we be free of the empire,'' he said after reviewing a Bolivian Army honor guard at the Cochabamba, Bolivia, airport. ``We need to find a different road, one that is different from neoliberalism which is the road to hell.''

Leaders from Brazil, Argentina, Venezuela, Peru, Bolivia, Uruguay, Paraguay, Chile, Ecuador, Guyana and El Salvador are meeting today and tomorrow in Cochabamba for the Second Annual Summit of Leaders of the South American Community of Nations.

While few of the leaders speaking on arrival today in Cochabamba spoke as critically of the U.S. as Chavez, they agreed with him that a lack of trade, road, rail and other ties across their continent are a major reason their economies lag behind the U.S. and Europe and may be unable to compete with a rising China.

``We here have different points of view but we realize that a lot of the criticisms we face as leaders are the result of a lack of integration,'' said Peru's President Alan Garcia. ``In this world of immense blocs and cultures we also represent a culture of immense power.''

War of the Pacific

Brazilian President Luiz Inacio Lula da Silva, in a speech passing his one-year term as leader of the group to Bolivia's Evo Morales, proposed the drafting of a treaty formalizing the relationship between the country's creating institutions to promote trade, transport and energy and financial services integration within one year.

``This is a continent that does not communicate as well as it should,'' he said. ``And next to transport the thing we need most is energy integration.''

Progress may already have been made on one of the region's oldest disputes, enmity between Chile and Bolivia stemming from the 1879-1884 War of the Pacific that ended with Bolivia losing its outlet to the Pacific to Chile.

Plans to build a gas pipeline from Bolivia, home to half of Latin America's natural gas reserves, through Chile to the Pacific led to protests that ultimately resulted in the election of Morales. Chile and Bolivia, which share a border, have not exchanged ambassadors since 1978.

Upon arrival in Cochabamba, Chile's President Michelle Bachelet said Chile and Bolivia had a long list of discussions under way and that she was confident the two countries would resolve their differences and achieve a high degree of trade, energy and infrastructure integration.

To contact the reporter on this story: Jeb Blount in Rio de Janeiro at jblount@bloomberg.net

Last Updated: December 8, 2006 21:03 EST