By Mario Osava
RIO DE JANEIRO, Mar 5 1996 (IPS)

The proposals by Brazilian President Henrique Cardoso for closer ties with Mexico, made during his visit here last week, have drawn a mixed reaction in economic and political circles.

Gazeta Mercantil, a leading financial newspaper, dubbed the proposal “Mexico’s newest and spectacular marketing gambit” and part of a multi-million dollar campaign to improve its international image.

Political scientist and President of the privately-run North American Studies Center Clovis Brigagao flatly declared Cardoso’s stay here was “a mistake.” He pointed out that the Brazilian delegation had not included any minister with a financial- orientated portfolio.

Instead, Cardoso was accompanied only by his culture and foreign relations ministers, giving the visit a political-cultural character and one of “nostalgia,” as Cardoso hobnobbed with his old Mexican intellectual friends while getting no practical results, Brigagao said.

On the other hand, Mexican senator and Foreign Relations Committee president Fernando Solana deemed Cardoso’s visit to be “enormously important” in that it initiated a process of rapprochement “at the highest level.”

He declared that an alliance between the two countries would determine the future of Latin America because Mexico and Brazil together account for 60 percent of the region’s population, exports and gross domestic product and are also geopolitically important, forming the sub-continent’s north-south axis.

“Latin America will only advance as far as any Brazilian- Mexican alliance goes,” the Mexican senator said in Sao Paulo, where he was serving as first alternative president at a meeting of the Latin American Congress’s directorate.

Solana declared that Cardoso’s visit had brought new life to Mexico’s “Latin America soul,” and described the proposed bilateral alliance as “something broader than a trade agreement,” with political features that will yield economic fruits in the future.

The Brazilian press said the Mexicans had surprised the Brazilian authorities with their proposals to increase bilateral trade in goods and services, expand investments and protect intellectual property.

Newspapers speculated that Cardoso had avoided making new commitments to Mexico by explaining that the proposals would have to be discussed with Brazil’s Common Market of the South (Mercosur) partners, Argentina, Paraguay and Uruguay.

Brigagao declared bluntly that Mexico was mired in an economic crisis that would require “five to 10 years of recovery” and accordingly was interested in gaining political and economic support from the south to strengthen itself against the United States and Canada, its North American Free Trade Agreement (Nafta) partners.

That explained its search for a broadly-defined alliance with Brazil, he said.

Mexico’s future in regional economic integration depends on how the movement toward hemispheric free trade proceeds, Brigagao pointed out. At present, the integrationist movement must maneuver between Mercosur, Nafta, and the Latin American Integration Association.

Brazil’s economic diplomacy gives priority to extending the Mercosur agreement to all of South America, which will strengthen its bargaining position with the United States to create an Americas-wide free trade bloc.

Mexico, meanwhile, has sought for some time to diversity its economic relations, signing a trade agreement with Chile before NAFTA, joining the Organization for Economic Cooperation and Development (OECD), and participating in other integrationist groups, Solana observed.

But foreign trade statistics show that the U.S. remains a powerful force of economic attraction for Mexico.

In 1995, Mexico exported goods and services valued at 42.565 billion dollars to its powerful northern neighbor and imported 34.469 billion dollars’ worth. This total trade represents 61 times the value of Mexican-Brazilian trade.

The previous year, before Mexico’s financial crisis broke out in December 1994, the Mexico-U.S. exports and imports were 51.645 billion dollars and 54.790 billion dollars, respectively, for total trade of 106.435 billion dollars, some 38 percent more than in 1995.

Total trade with Brazil also fell by 21 percent between 1994 and 1995 to 1.267 billion dollars, but the Mexican peso’s steep devaluation reversed the pattern of bilateral trade.

Where Mexico ran an 849 million dollars deficit in 1994, it posted at 223 million dollars trade surplus last year with South America’s giant. (FIN/IPS/tra-so/mo/dg/cs/96)

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