Brazil Enlists China in a Global Economic Alternative

NotiSur - South American Political and Economic Affairs, May 28, 2004 | Go to article overview

Brazil Enlists China in a Global Economic Alternative

President Luiz Inacio Lula da Silva added an ambitious business trip to China to a string of international-outreach initiatives undertaken since becoming president of Brazil a year and a half ago. This foray into foreign trade comes as the largest economy in South America struggles to feed its people. He has so far forged new economic links with the Southern Cone Common Market (MERCOSUR) and the Comunidad Andina de Naciones (CAN) countries (see NotiSur, 2004-04-23), as well as with the European Union (EU).

Both countries are looking toward strengthening what both have termed a "strategic association." China and Brazil have partnered successfully in the recent past on World Trade Organization (WTO) matters and on Cairns Group strategies. Speaking to students at Beijing University, Lula proposed expanding commerce between MERCOSUR and China, India, and African countries (see NotiSur, 2003-11-14). He said work on a MERCOSUR-China free-trade agreement is in the early offing. "We're trying to build a new economic and trade geography," he said. "Part of that push is aimed at boosting trade flows among developing countries." Brazil's economy reported a 2.7% spurt for the first trimester of 2004.

The working relationship is not new. China and Brazil worked together to scuttle WTO talks at Cancun last year (see NotiSur, 2003-09-18), and Lula mentioned closer ties with China in his January 2003 inaugural speech. Since then, China has become Brazil's third-largest trading partner behind the US and Argentina. Brazil has increased exports of soybeans, iron ore, and steel to the world's most populous country. Brazil is the world's largest exporter of soybeans, beef, coffee, and sugar.

An alternative to economics as usual

Brazil is not just seeking but is building an alternative in the developing world to US-dominated trade blocs. In Lula's view, "China, with its 1.3 billion people, is the most economically growing country in the world and one of the most important." That is what he told his own people on the radio the night before departing on the trip. More than 400 Brazilian entrepreneurs and an assortment of state governors, senators, deputies, and ministers accompanied him on the venture. Lula said he wants to have a relationship with China that gives both countries political, commercial, and economic influence in the world.

Not to overlook the sociocultural aspects of the relationship while at the university, Lula officiated at ceremonies opening the Center of Brazilian Studies. It will be the first such university program of its kind in Asia, designed to teach Brazilian Portuguese language and Brazilian culture. "A truly solid bilateral relationship cannot be based solely on interaction between governments but must be about societies and individuals also, mobilizing minds and awakening emotions," he said. In furtherance of mobilization and awakening, in Beijing, Lula opened a show of indigenous art from Amazonia.

Booming China imported US$412 billion in goods from the rest of the world in 2003. To date this year, Brazil sold them US$1.6 billion and bought from China US$900 million, mostly machinery and industrial and agricultural equipment. In 2003, China sold Brazil about US$2.1 billion and bought about US$4.5 billion. In 2002, the figures were US$1.5 billion and US$2.5 billion, respectively.

China is the jewel in the lotus petaled by Brazil, India, South Africa, and Russia. Together, they hope to protect themselves with, according to the Brazilian president, "a new world-trade geography so that these and other developing countries don't feel so dependent on the rich countries."

Lula explained, "We all know the importance of the United States and the European Union in this trade relationship, but we also know the difficulties and limitations we arrive at because of subsidies and the struggles we have to confront within the framework of the WTO. …

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