- The Washington Times - Thursday, November 21, 2002

RIO DE JANEIRO (UPI) Otto Reich, in charge of Western Hemisphere affairs for the U.S. State Department, headed to Brazil yesterday to begin untangling a web of mistrust between the two largest economies in the Americas.
At the top of the agenda will be smoothing over bilateral trade relations, a tough task for any diplomat, let alone Mr. Reich, whose reputation is mixed in Latin America.
The Cuban-born Mr. Reich a former ambassador to Venezuela is often criticized in the region's media, not only for his tough line on Cuba but also for the perception that his ideas on the region are "neo-imperialistic."
Thus, the highest-level meeting yet between the United States and Brazil's president-elect, the leftist Luiz Inacio Lula da Silva, could be a bit tense.
Mr. Lula da Silva has blasted the Bush administration's efforts on free trade, calling them attempts to "annex" Latin America. He has also previously insisted that Cuba be able to participate in regional trade.
Mr. Lula da Silva is scheduled to visit the White House Dec. 10.
Mr. Reich's visit to Brazil and meeting with Mr. Lula da Silva tomorrow are meant to ease relations ahead of that trip. That's especially true of the foundering Free Trade Agreement of the Americas, with Brazil and the United States to share the chairmanship of the negotiations for the next two years.
The FTAA was proposed more than 10 years ago by President George H.W. Bush. Since 1998, negotiators have been working hard to meet a 2005 deadline for concluding the pact. But there is little chance of meeting that deadline.
Brazil is the chief critic of U.S. trade policy in the Americas. U.S. policies on steel and its $180 billion agricultural subsidies program arguably hurt Brazil land of iron ore mines and orange groves more than any other country.
Talk of free trade by some countries "doesn't agree with the protectionism of their markets and production sectors," Sergio Amaral, Brazil's minister of development, industry and foreign trade, told a meeting on hemispheric integration in Brazil on Tuesday.
Mr. Lula da Silva, however, has said in the past that his first priority is fortifying the maligned Mercosur trade bloc, which comprises Brazil, Argentina, Uruguay and Paraguay.
Making this bloc stronger, Mr. Lula da Silva says, will give the countries more leverage in trade talks with the United States.
Yesterday, a senator-elect from Mr. Lula da Silva's Workers' Party said the incoming government wants to establish a bilateral trade agreement between the Mercosur and the United States before moving on the FTAA.
"We want to double our trade with the United States in four years and triple it in eight," said Aloizio Mercadante. "Our objective is to arrive at $100 billion in bilateral trade in eight years."
Mr. Mercadante pointed out that pursuing a bilateral agreement between the Mercosur and the United States wouldn't halt Brazil's efforts on the FTAA, but it is hard to see how it would speed them up.
"The United States has bilateral initiatives across the entire continent, but not with Mercosur," Mr. Mercadante said after meeting with Deputy U.S. Trade Representative Peter Allgeier.
All this has, to the dismay of the Bush team, ground FTAA talks to a halt, despite the fast-track trade authority granted to the current President Bush and the lure of opening the world's biggest market to struggling Latin American nations.

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