Brazil Tries to Prevent War with Argentina

     Brazil Tries 
to Prevent War with Argentina

    Brazil’s Foreign Trade
    Minister, Luiz Fernando Furlan said it
    would be a "bucket of cold water," if the Argentineans decided
    to restrict imports of Brazilian textile goods. Furlan said that he
    is optimistic and hopes the Argentineans refrain from applying
    this and other restrictions threatened by Buenos Aires.
    by: Gabriela

    Brazil hopes to resolve this week the diplomatic flap caused by Argentina’s
    decision to impose restrictions on imports of Brazilian home appliances, on
    the eve of the Mercosur summit meeting.

    According to the Minister
    of Development, Industry, and Foreign Trade, Luiz Fernando Furlan, the Argentinean
    restrictions will only take effect after they are regulated, which has still
    not occurred.

    Since representatives
    of the Brazilian and Argentinean governments and appliance manufacturers will
    meet this week in Buenos Aires to discuss this matter, the Minister said that
    he is optimistic and hopes the Argentineans refrain from applying the restrictions.

    "After this meeting,
    the Argentinean government will evaluate whether regulation will be necessary,"
    Furlan pointed out.

    According to the Minister,
    the President of Argentina, Néstor Kirchner, expressed willingness
    to negotiate with the Brazilian government over sticking points in trade between
    the two countries.

    In two weeks, a new meeting
    between Brazilians and Argentineans will be scheduled for each side to expound
    its desires in the trade sphere, so that the two can seek common ground.

    "The Argentinean
    government should present Brazil with the aspects it considers relevant to
    its development, and, from there, we shall try to discover points we have
    in common," Furlan said.

    According to the Minister,
    the idea is to avoid trade disputes and search for amicable solutions to impasses.
    "We have to take a global view of the Mercosur, rather than remain sparring
    over temporary issues," Furlan argued.

    In his opinion, Argentina
    felt that its industrial park needs refurbishing, since the country is growing,
    and the same thing is happening in Brazil—that is why the neighboring
    country decided to limit imports from Brazil.

    Brazil’s Minister of Finance,
    Antônio Palocci, endorsed Furlan’s words. For Palocci, when the economy
    is growing, productive activities are reactivated, and it is natural for trade
    disputes to occur.

    "It is important
    for a dialogue to exist between the governments. These controversies do not
    impede composing a ample negotiation," he said.

    Furlan emphasized that
    the Brazilian government is not treating the trade dispute with Argentina
    with "emotionality." "Emotional discussion is always very impassioned,"
    he said.

    Palocci and Furlan, who
    were in Argentina for the Mercosur’s summit, spent hours presenting figures
    on Brazilian home appliance exports to Argentina in recent months to the Argentinean
    Minister of the Economy, Roberto Lavagna. According to Furlan, these sales
    have been perfectly normal.

    As for the threat made
    on July 7 by the Argentinean President, Kirchener, to impose restrictions
    on other Brazilian products, especially in the textile sector, Palocci had
    recourse to the Old Testament to define his point of view.

    "Each day with its
    own tribulation," he commented ironically. In Palocci’s opinion, it would
    be premature to discuss a question that hasn’t even arisen yet.

    For his part, Minister
    Furlan said it would be a "bucket of cold water," if the Argentineans
    decided to restrict imports of Brazilian textile goods. "Some months
    ago the Brazilian textile sector was the subject of an extensive process of
    negotiations. If the two countries fail to honor the commitments assumed in
    the negotiations, it would represent a bucket of cold water for us Brazilians,"
    he admitted.

    Lula Confident

    President Luiz Inácio
    Lula da Silva affirmed that he does not consider Argentina’s restrictions
    on imports of Brazilian household appliances a problem. "This is the
    result of growth in the economy and growth in trade relations between the
    two countries," the President declared at the conclusion of the 26th
    Summit Meeting of Mercosur Heads of State.

    "God grant that other
    problems arise in consequence of our economic growth. What is important is
    for Brazil and Argentina to be aware that Brazilian industry and Argentinean
    industry need to grow," the President remarked.

    Lula said that he confides
    in the efforts of the two countries’ Ministers to resolve the problem.

    Luiz also called for flexibility
    to overcome disagreements among the economic bloc’s member countries. "Flexibility
    was and continues to be necessary to meet demands stemming from disagreements
    among the member States," he affirmed.

    According to the President,
    in order to strengthen the customs union and construct the common market envisioned
    in the Assunción Treaty, which created the Mercosur, it is essential
    to deepen and expand the bloc in such areas as services and government purchases.
    For President Lula, the development of the Mercosur cannot be solely in national
    terms; it must have a regional dimension.

    "Brazil’s prosperity
    has to be the prosperity of our partners in the region. The Brazilian economy
    has entered the phase of solid growth. Conditions are in place to expand exchange
    and cooperation with our neighbors," he affirmed.

    After praising the leadership
    exercised by Argentina, which occupied the temporary presidency of the Mercosur
    during the past six months, he recalled that, after 10 years of negotiations,
    the bloc is moving in the direction of integration with the Andean countries.
    "What seemed impossible is happening. The Mercosur is not indifferent
    to our Latin America," he remarked.

    Lula expressed his satisfaction
    with the participation of Mexican President, Vicente Fox, in the encounter,
    and he said that he awaits that country’s speedy entry into the bloc as an

    Chile, Bolivia, and Peru
    are already associated members. Mexico’s entry still depends upon negotiations.
    Lula also highlighted the presence of Venezuelan President, Hugo Chávez,
    at the event.

    The President mentioned
    the negotiations in which the Mercosur is engaged with India, South Africa,
    Egypt, China, and Japan, and he declared that Brazil is assuming command of
    the Mercosur with a sense of "responsibility and urgency."

    For Lula, the Mercosur
    is more than just a project for the negotiation of tariffs and free trade
    among the member countries. He said that the bloc must take advantage of new
    and advanced fields of knowledge.

    "In this respect,
    Brazil is willing to share with its Mercosur partners the benefits it derives
    from nuclear energy and space exploration."

    Court for Disputes

    From now on the Mercosur
    will have a court of last resort to judge trade disputes among the bloc’s
    member countries (Brazil, Argentina, Uruguay, and Paraguay)—the Permanent
    Appeals Court. The organ was instituted at the 26th Mercosur Summit
    Meeting, which ended July 8 in Puerto Iguazú, Argentina.

    The summit meeting gathered
    the heads of State and Ministers from the four countries and the three associated
    States (Chile, Bolivia, and Peru), as well as the Presidents of Venezuela,
    Hugo Chávez, and Mexico, Vincente Fox, who were there as official guests.

    Up to now, when member
    countries disagreed over trade questions, the Court of Arbitration was called
    on to analyze the impasse. However, if a party was dissatisfied with the Court’s
    decision, it had to direct its appeal to other international forums, such
    as the World Trade Organization (WTO).

    With the Permanent Court,
    countries will no longer need to seek other venues for their appeals. The
    Court, which will be based in Assunción, Paraguay, should begin to
    function in the coming months, according to the Brazilian Ministry of Foreign

    In addition to the Court,
    the Mercosur Presidents approved President Hugo Chávez’s request to
    admit Venezuela to the economic bloc as an associate member. Venezuela’s entry
    should be made official after its free trade agreement with theMercosur is
    registered with the Latin American Integration Association (ALADI).

    Mexico also submitted
    an entry request, which received the backing of Brazilian President Luiz Inácio
    Lula da Silva. In his address at the Summit Meeting, President Lula pointed
    out that he and his Mexican colleague, Vicente Fox, acted together to begin
    negotiations for Mexico’s membership in the bloc.

    Some details of the free
    trade agreement between Mexico and the Mercosur have yet to be concluded.
    Therefore, Mexico will only be accepted into the bloc after the agreement
    is ready.

    At the meeting, Brazil
    took over the temporary presidency of the Mercosur from Argentina, for a term
    that lasts six months. The bloc’s heads of State will meet again in December,
    in Ouro Preto, Minas Gerais. On this occasion Brazil will pass the command
    of the bloc to Paraguay.

    Democracy for Bolivia

    President Lula urged Bolivia
    to take the path to democracy, calling it the best instrument for economic
    and political recovery. Last October, Bolivia went through a political crisis,
    which resulted in the resignation of president Gonzalo Sánchez de Lozada
    as a popular uprising raged throughout the country.

    During a speech at a ceremony
    celebrating the signing of agreements with Bolivia, Lula declared that the
    decision by President Carlos Mesa (who substituted Sanchez de Lozada) to hold
    a referendum on the country’s energy policy next week and municipal elections
    in December "will make it possible for Bolivia to discover what its population

    Lula went on to say that
    "At this moment, when Bolivia gathers strength, it can count on the friendship
    of the government and people of Brazil. That is the message we sent Bolivia
    last year during its crisis, and that is the message we send now. That friendship
    also underlies these agreements we sign today."

    Lula concluded by saying
    that Latin America needs a "Bolivia that is democratic, prosperous and
    united… a country based on the dreams of Bolivar who wanted borders to bring
    people together, not separate them," said the Brazilian President.

    Carlos Mesa endorsed those
    words, saying that democracy was the only mechanism that would enable Bolivia
    to get back on track. "We want democracy to be the crucial issue in our
    future," he declared, adding that he still intends to convoke a Constitutional

    Gabriela Guerreiro works for Agência Brasil (AB), the official press
    agency of the Brazilian government. Comments are welcome at

    from the Portuguese by David Silberstein.

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