Brazil, Argentina Eager for Details of Bush's Plan
Julia Michaels, Monitor, The Christian Science Monitor
AS President Bush begins his first South American tour here today, officials in five host countries are hoping the new, more sympathetic US attitude will soon be put into action.
But many local economists wonder just how far good intentions will go, given the problems to be addressed.
The Bush trip highlights a trend toward better relations among the southern cone countries of Brazil, Argentina, Uruguay, and Paraguay; and the United States. Last Wednesday, Brazil and Argentina signed a nuclear accord putting their nuclear programs under the safeguards of the International Atomic Energy Agency. They thus hope to remove a major obstacle to scientific cooperation with the US.
Also last week, officials of the four Latin nations met in Uruguay with US officials to begin drafting a framework for freer trade among all five, moving beyond existing achievements with Canada and Mexico.
Last summer, Mr. Bush announced his "Enterprise for the Americas Initiative." Focusing on the region's debt, trade, and investment troubles, the initiative proposes a free-trade zone from Canada to Argentina and forgiving some debts owed the US.
"We expect progress on the practical side of the initiative for the Americas," says an Argentine government official, "something to support the reordering of our economies that we have been undertaking." Support, the official added, could be in the form of US pressure on international financial organizations to expand their lending in the region and to help out on debt.
Brazilian officials, aware that their debt burden must be worked out largely with private creditor banks, look to the Bush initiative to reduce trade barriers to products such as orange juice, steel, and textiles.
"US trade protectionism has to end," says foreign ministry spokesman Jose Vicente Pimentel. "US law is so wide-ranging that any doubt about any sector of the Brazilian economy can generate retaliation ... we've got the sword of Damocles hanging over our heads." Americans now buy, he adds, close to 30 percent of Brazil's exports.
Despite such expectations, it's unclear just how far the US can or will go to help the region. The Bush initiative focuses on the private sector role in development, at a time when the US economy is in recession and the southern cone still poses big risks to investors.
Economists also say the hemispheric solidarity Bush envisions is likely to run into many of the same obstacles Argentina and Brazil have met with since they started cutting tariffs in 1985. These include never-ending problems with unemployment and price inflation, differences in laws, education, and income, forbidding geography, transportation difficulties and stubborn bureaucracies. …