SOUTH AMERICA:
Brazil's Business Community not Keen on Integration Plan
Mario Osava
The enthusiasm shared by the Brazilian
government and other proponents of the South American community of nations
that began to emerge Wednesday contrasts with the scepticism and opposition
of Brazil's business community towards the ambitious integration plan.
RIO DE JANEIRO, Dec 8 (IPS) - The new South American union is a "geopolitical fiction", stated an
editorial Tuesday in the conservative O Estado de Sao Paulo newspaper, which
is close to the business sector.
The plan is a "grand fantasy" based on "two less ambitious fantasies": the
Mercosur (Southern Common Market) trade bloc, and its free trade agreement
with the Andean Community of Nations (CAN), the editorial added.
Another daily paper in Brazil, Valor Económico, concurred with that view,
asserting that there is "more symbolism than substance" in this union of
"countries with divergent economic and political interests," which is based
on a questionable "geopolitical agenda".
These expressions are in line with the negative stance taken by Brazil's
National Confederation of Industry (CNI) towards the agreement reached in
October by Mercosur and CAN.
That agreement, to gradually create one big free trade bloc, is at the core
of the South American community, whose founding document will be signed by
the leaders of 12 South American nations at their Wednesday and Thursday
summit in Peru - their third meeting since 2000.
According to the CNI, the promised "free trade" between Mercosur (Argentina,
Brazil, Paraguay and Uruguay) and CAN (Bolivia, Colombia, Ecuador, Peru and
Venezuela) is based on a "tangle" of bilateral accords, with 67 different
deadlines for the phasing out of import tariffs.
The CNI also says the assymetries involved are frustrating.
Within five years, Brazil will lift import duties on more than 90 percent of
products from the Andean nations, whose markets, on the other hand, will
only begin to open up to most Brazilian goods after six years.
For example, the duties on a majority of the manufactured goods that Brazil
would like to export to the Andean markets will only be removed at the end
of the 15-year tariff lifting period, Brazil's industrialists complain.
Local manufacturers do not expect any great increase in the flow of trade
between the two blocs, which has remained basically steady since 1995, when
it totalled 5.1 billion dollars.
The agreement is also assymetrical in agriculture, according to the
International Trade and Negotiations Research Institute (ICONE), which
advises industry in Brazil.
In the first eight years, Brazil will grant exemptions to 89.6 and 92.9
percent of farm imports from Colombia and Venezuela, respectively.
Meanwhile, those countries will eliminate tariffs on just 36.5 percent of
Brazilian products, in the case of Colombia, and 22.5 percent in the case of
Venezuela. Duties on the rest of the products will be phased out within nine
to 15 years, while imports of some products will be limited by means of
quotas.
Major Brazilian exports like soy, sugar and chicken will have to wait the
longest, in some cases 15 years, before duties are reduced.
But agricultural trade between the two blocs and the competition posed by
farm products from the Andean nations are so limited that a lack of
reciprocity does not worry Brazil's agribusiness sector, according to André
Nassar, executive director of ICONE, who says the agreement is basically
"political".
The government of leftist President Luiz Inácio Lula da Silva has been one
of the driving forces behind the creation of the South American community of
nations.
Enrique Amayo Cevallos, a professor of Latin American relations at the
public University of Sao Paulo, told IPS that those who look at only the
aspects involving trade lack a "strategic" vision, and forget the need for
integration for the sake of future development, as well as the need to join
forces to confront the globalisation process on a better footing.
The new South American community of nations will unite the economic strength
of Mercosur, three of whose members are on the Atlantic coast, with the
strategic location of the Andean countries on the Pacific, he underlined.
For the first time, the conditions are in place "to turn the longstanding
dreams of integration into reality" given the greater "internationalisation"
of the Mercosur economies and the growing vigour of Asia, which strengthen
the strategic importance of the South American countries located on the
Pacific coast, said Amayo Cevallos, a Peruvian who has lived for many years
in Brazil.
The new unity of South America gives rise to "interesting" prospects in the
medium term, he said, such as the cooperation that is needed between the
Andean and Amazon countries, in order for them to protect and benefit from
their shared riches, such as biodiversity and water.
Brazil, for example, will lose bargaining power if Colombia and Peru yield
to U.S. pressure on the question of patents, in the free trade agreements
that they are currently negotiating with the United States, because that
would open up access to the biodiversity of the Amazon jungle in those
Andean nations, which is nearly identical to the biological wealth of
Brazil's Amazon jungle, he warned.
Without integration and joint management of water resources, the water in
the Amazon jungle region could become a source of conflict in the future,
added Amayo Cevallos. Many of the rivers flowing through that area emerge in
the Andean nations, which leaves Brazil at a disadvantage, he noted.
That situation is reversed in the Rio de la Plata basin, where Brazil built
hydropower dams on rivers running into the estuary, ignoring protests from
Argentina in past decades.
The summit, which will formalise the agreement between Mercosur and CAN
(while incorporating Chile, Guyana and Suriname), is taking place in the
cities of Cuzco and the nearby Ayacucho, in southern Peru.
The location and date of the summit represent "a symbol of autonomy,"
because Cuzco was the capital of the Inca empire, the "only great
autochthonous, autonomous civilisation" in South America, and Ayacucho was
the site of the battle that put an end to Spain's colonial presence in the
region exactly 180 years ago, on the ninth of December, said Amayo Cevallos.
He added that given the importance of the summit, the absence of Argentine
President Néstor Kirchner (who cited health reasons for not attending), and
of presidents Lucio Gutiérrez of Ecuador, Nicanor Cuesta Duarte of Paraguay,
and Jorge Batlle of Uruguay is incomprehensible.
Others who do not plan to attend are Uruguayan President-elect Tabaré
Vázquez and Mexican President Vicente Fox, who were invited as observers.
**** (END/2004)
