Wednesday, December 11, 2002

Brazil’s president-elect, Luiz Inacio Lula da Silva, yesterday pressed an aggressive economic agenda that includes regional integration and free trade with the United States.
But Mr. Lula da Silva, in Washington to meet President Bush for the first time since he was elected in October, cautioned that talks on a hemisphere-wide Free Trade Area of the Americas (FTAA) would not be easy and would not be simply on U.S. terms.
“I told President Bush we will be very tough, as tough as the Americans are in the negotiations, but when we come to an agreement, we will be loyal in our commitment. This is how I am going to behave,” he said during a speech at the National Press Club.
Brazil and the United States are co-chairing the FTAA process through November 2003 as 34 democracies prepare positions on market access leading up to a regional summit in Miami at the end of next year.
“Whether there is an agreement depends on both Brazil and the United States,” said Peter Hakim, president of the Inter-American Dialogue, a Washington policy group. “You don’t have an FTAA without a U.S.-Brazil agreement. If you do get an agreement, no other country would stand outside it.”
Mr. Lula da Silva, a left-leaning former labor leader, emphasized similarities between the two countries but also underscored some differences as he prepares to preside over Latin America’s most populous nation.
He will take office Jan. 1 trying to fulfill election promises about boosting his economy while seeking international backing to pay off debts and put Brazil on more solid financial footing.
“We will give priority to fighting against hunger, unemployment and crime,” Mr. Lula da Silva said.
But he also touched on themes important to international markets.
“My new administration is going to be characterized by fiscal responsibility, the fight against inflation, and respect for contractual obligations and agreements. These form the basis for resuming sustained economic growth,” he said.
Mr. Lula da Silva, who has lost presidential bids on a populist platform three times, toned down his rhetoric during the most recent campaign. Since he won election, he has worked to calm markets as he outlines an economic plan.
Increasing exports and expanding the domestic markets are key components of Brazil’s plan for economic growth, he said.
Mr. Lula da Silva and Mr. Bush discussed trade, economic relations and the fight against poverty during a private meeting yesterday.
“This was a very constructive and positive meeting, from the president’s point of view,” White House spokesman Ari Fleischer said. The two did not talk about specific trade acts or trade initiatives, he added.
“But the president was encouraged to hear the message that President Lula offered concerning trade and the importance of trade to economic development, broadly speaking,” Mr. Fleischer said.
Mr. Lula da Silva said the dialogue was “frank and direct.”
Even with a good start, both sides have much ground to cover before reaching a trade agreement.
Brazil has emphasized the importance of market access for its agricultural goods. It’s government has said that U.S. agricultural tariffs are too high and subsidies too generous.
The United States has countered that it cannot reach an agreement on agriculture that does not include Japan and the 15-nation European Union.
Yesterday Mr. Lula da Silva underlined the important role of South America’s biggest trade bloc, Mercosur; regional integration and ties to Europe.
Mercosur was created by Argentina, Brazil, Paraguay and Uruguay in March 1991 with the goal of creating a common market. Analysts see it as an alternative model to NAFTA during FTAA negotiations.

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