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BRAZIL-CHINA: An Asymmetric Trading Partnership

Mario Osava

BRASILIA, Apr 16 2010 (IPS) - “Brazil must increase the added value of its sales” to balance its trade with China, said Brazilian President Luiz Inácio Lula da Silva, the only note of criticism in his references to the partnership between the two countries after they signed a Joint Action Plan.

Bilateral trade showed “spectacular” growth of “780 percent since the beginning of my administration” in 2003, and reached 36 billion dollars in 2009 in spite of the global economic crisis, Lula said.

But this trade is asymmetric. Brazil exports almost exclusively minerals and agricultural products, and imports Chinese manufactured goods.

The various agreements signed at Thursday’s meeting in Brasilia cover the agricultural sector, including cooperation between research centres and phytosanitary (plant health) issues, aimed at expanding commodity exports from Brazil.

Agreements were also reached on oil exports, and on cooperation between the two countries’ state oil companies for exploring Brazilian reserves of fossil fuels. The technology sector was also included, for example joint satellite launchings, a programme that has been developed over many years, as well as intellectual property.

But the main document signed by Lula and Chinese President Hu Jintao was the Joint Action Plan, which establishes guidelines for expanding and deepening all-round bilateral cooperation over the next four years.

The plan sets out goals, methodologies and initiatives in 11 areas. For instance, a Cultural Month of China in Brazil is planned for this year, and a similar event for Brazil will be held in China in 2011. In the sphere of education, scholarships and other exchange programmes were announced, as well as the teaching of both languages at the two countries’ universities.

The 9,857-word (in Portuguese) document also defines the tasks of a number of sub- commissions, coordinated by the China-Brazil High Level Coordination and Cooperation Commission, covering joint action in space cooperation, information technologies, science, agriculture, plant health, energy and mining, as well as more general issues like economics and politics.

The two countries have “universal vocations and global interests” in common that underlie the “strategic partnership” between Brazil and China, said Lula, who called Hu a “friend” and “statesman.” He expressed deep condolences to China over the earthquake that hit the northwestern part of that country on Wednesday.

Because of the disaster, which killed over 700 people and injured thousands, Hu left Brasilia Thursday night, suspending his planned visits to Venezuela and Chile.

The BRIC (Brazil, Russia, India and China) Summit, originally scheduled for Friday morning, was also brought forward to Thursday evening.

Hu’s visit coincided with the fourth summit meeting of the India-Brazil-South Africa Dialogue Forum (IBSA), established in 2003 as a coordinating mechanism to promote cooperation between countries and regions of the global South, including civil society.

The opportunity provided by the presence of the presidents and Indian Prime Minister Manmohan Singh was taken to convene a summit of the BRIC group.

At the presentation of the Brazil-China agreements, Lula referred to Brazil’s economic progress, which together with China’s rapid growth means the two countries have “the capability, and the obligation, to fight for a new world order.”

This must replace today’s “asymmetric, dysfunctional globalisation,” he said.

Today, Brazil is an agricultural power and the phytosanitary agreement signed with China will expand its agricultural exports. But Brazil should also increase its sales of technological products, like airplanes and their parts, because the two countries also cooperate on aviation and space technology.

The launching of the fourth joint Chinese-Brazilian satellite, possibly next year, is a sign of the strengthening of the bilateral partnership, Lula said.

The Chinese state company Sinopec is now the largest buyer of Brazilian oil, importing 200,000 barrels per day, Lula said.

The partnership extends to the sphere of international negotiations, as China has joined the Group of 77 (G77) countries that represents the developing world in multilateral bodies.

China’s annual economic growth, at close to double digits, has created a large market for Brazilian agricultural and mining products, but analysts and the business community fear that the South American country may end up a mere supplier of raw materials. Closer bilateral ties have already led Brazil to refer to China as a “market economy,” although economists in this country are sceptical of this description of the Asian power.

Hu said Brazil and China would diversify and increase bilateral trade, and expressed his thanks for the solidarity received in the wake of Wednesday’s disaster.

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