Together, South America will be strong
-Brazil's foreign minister on trade strategy
By Miranda La Rose
Stabroek News
June 9, 2004
Trade in the next few decades will be conducted not by individual countries, but by blocs. And even a country as large as Brazil would have a small role in trade negotiations if it is not part of a union.
This is the opinion of Brazil's Minister of State for Foreign Relations in the Ministry of External Relations, Celso Amorim who was a guest lecturer at the Foreign Service Institute, New Garden Street on Thursday afternoon. Amorim said that awareness of this development has propelled Brazil to work hard at the regional level of Mercosur and for the integration of the whole of South America.
Current trading trends put the US in a bloc by itself, the European Union as an ever-enlarging bloc, and China as another country with the potential of a bloc.
Noting that Brazil places much emphasis on regional integration, he said the Brazilian constitution speaks of South American integration as a priority but that does not exclude integration in the wider world.
In promoting South American integration, Amorim noted that Brazil's President, Luis Inacio Lula da Silva invited and received for working visits all the heads of governments or state of South American countries during the first year of his current tenure. Such a practice was something totally unheard of before by any Brazilian or South American leader. In addition, he noted that Lula has visited several countries with the objective of reaching agreements to benefit Brazil and the countries in the region.
President Bharrat Jagdeo visited Brazil twice at Lula's invitation.
Though he himself was a minister in a previous government about a decade ago, Amorim said he had never visited Peru. In this government he has visited five times.
He recalled that when Lula took office Mercosur countries, Brazil, Argentina, Uruguay and Paraguay, were taking different paths though they were supposed to be negotiating together as a union. "I would not say things were falling apart because the political will of working together was there and relations were good among countries. But in concrete terms the countries were taking different paths even in external negotiations." One of the Mercosur members had negotiated a free trade agreement with Mexico and Brazil itself had negotiated a limited trade agreement with Mexico as well.
However, he added, "we have to realise that different countries have different needs but it is very important that we have cohesiveness in our process of integration. One of the best examples is the European Union, which is not only a free trade area but also a big force in world economic relations and now becoming more of a political union among the member states. This is a lesson for us."
An example of South American regional integration, Amorim said, was the agreement Mercosur concluded with the Andean Group, which together takes care of a big part of South America. Brazil as an individual country also has agreements with Chile, Bolivia and Guyana.
Brazil is currently backing a process of integration that takes into account synergies between the various countries. One of the factors that helped to solidify Mercosur was the recognition that Paraguay and Uruguay have needs that were different from Brazil and Argentina, so consideration was taken in their timetables for trade liberalisation and convergence of the Common External Tariff. He said if the bigger economies do not act with some degree of generosity in the negotiations there would be friction.
Stating that Mercosur is proposing to negotiate a free trade area with Caricom, Amorim said Brazil would have to treat countries such as Barbados or Grenada in the same manner as it did the Andean Group. Respecting certain sensitivities, however, has sometimes been to the displeasure of some sectors in the Brazilian economy itself, particularly in the Brazilian sugar sector, which is very competitive.
He said the more the countries of Latin America and the Caribbean are able to work together and co-ordinate their position the better it would be for the region at the level of the Free Trade Area of the Americas, other groups and the World Trade Organisation. "I say that because this is probably the more crucial negotiations for us because of the question of agricultural subsidies."
Apart from these efforts at South American integration, Brazil has been active outside the region. Brazil, India and South Africa are currently trying to co-ordinate some south-south projects. Amorim said that once successful, the three countries would open their doors to other countries but that will have to be done in a way that is practical and pragmatic.
South-south co-operation does not exclude north-south co-operation but rather complements it and enables developing countries to strive for better deals, he said.
In the case of the FTAA, he said there was a lot of talk that Brazil would be against it but that was not true. He said Brazil could not ignore the US market, the biggest in the world and Brazil's biggest trading partner, which takes 25% of Brazilian exports. It would be in Brazil's interest, he said, to liberalise the US market for Brazilian exports and vice-versa but Brazil's problem with the FTAA was the unbalanced way in which it was being negotiated.
Amorim felt that the Miami Ministerial Meeting somehow corrected the imbalance and has created the appropriate framework to finish the FTAA in a way that takes into account some of the differences between the countries. "We cannot have so many different countries in so many different situations with a one-size fit-all solution", he said.