- The Washington Times - Wednesday, October 30, 2002

The Bush administration appears determined to look on the bright side as leftist labor leader Luiz Inacio Lula da Silva prepares to take power in Brazil after a landslide win in the presidential election on Sunday.
Despite Mr. Lula da Silva's long history of anti-capitalist rhetoric, his past praise of Cuban leader Fidel Castro, and campaign criticisms of U.S. trade and security policy, American officials say that they detect a new moderation in the man popularly known as Lula and do not expect bilateral ties to nose-dive when he assumes office on Jan. 1.
"One would have to be a nitpicker extraordinaire to find fault with the president-elect's first statements" since the election, said James J. Carragher, director of the State Department's Office of Brazilian and South Cone Affairs.
Mr. Carragher, speaking yesterday at a forum on Brazil at the Center for Strategic and International Studies, said that the Bush administration foresees changes in the Latin American country's foreign policy, including more skepticism of a hemispherewide free-trade pact than was the case under outgoing center-right President Fernando Henrique Cardoso.
"But we think much of the change will be in tone and style, rather than substance," said Mr. Carragher, who cited Mr. Lula da Silva's campaign admission that "Brazil has changed, and I have changed."
The surge this year of Mr. Lula da Silva's left-wing Workers Party, known by its Portuguese acronym PT, spooked international markets, drove down the currency of Brazil, and hammered the country's already-struggling economy by forcing up its government's borrowing costs.
There were fears that the 57-year-old Mr. Lula da Silva, making his fourth bid for the presidency, would clash with the International Monetary Fund and even default on the country's $260 billion external debt.
Mr. Lula da Silva, the son of a poor farmer who dropped out of school after fifth grade, moved quickly after his election to soothe international investors, pledging to follow the Cardoso government's anti-inflation policies and to honor the country's foreign debt.
Despite promising to put social reform and hunger at the top of his agenda, the president-elect may face more trouble from disappointed supporters than from opponents, according to Anthony S. Harrington, U.S. ambassador to Brazil in the Clinton administration.
Given the domestic and international constraints, "Lula may face the greatest pressure from his own core constituency," Mr. Harrington said. "He may face a greater challenge from the left than from the right."
Still, some conservatives worry that the dangers posed by Mr. Lula da Silva have been underestimated.
During the campaign, he criticized President Bush's push against Iraq, said that he would not allow Washington to treat Brazil as a "banana republic," and called the U.S. proposal for a free-trade pact for North and South America "an annexation of Latin American economies to the economy of the United States."
At one point, Mr. Lula da Silva even questioned Brazil's decision to give up an advanced nuclear-weapons development program and backed a plan by Embraer, Brazil's aircraft maker, to develop a fighter plane to rival the U.S. F-16.

U.S. financial markets await indications of Mr. Lula da Silva's fiscal policies.

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