TRADE-BRAZIL: To the Rescue of the Original Mercosur

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Oct 28 2002 (IPS) - The victory of Luiz Inácio Lula da Silva in Brazil’s presidential run-off vote Sunday could mark a turnabout for Mercosur (Southern Common Market), return to its original path of productive, political and strategic integration.

With Lula as Brazil’s president, the four-nation bloc of South American Southern Cone countries will enter into a new phase of activity, but the focus will not be trade only, Alberto Ferrari Etcheberry, director of the Buenos Aires Institute of Brazilian Studies, told IPS.

Ferrari was Argentina’s deputy foreign minister for Latin American affairs in 1985, when that country and Brazil signed the integration accords that served as the seed for Mercosur, created finally in 1991 with the participation of Paraguay and Uruguay.

"The region is essential for Brazil, not so much for economic reasons as for political," said the former diplomat.

"Brazil is the tenth economy in the world, but does not have the political weight to defend its interests. It is this motivation, which is what gave rise to the integration treaties, that is going to be reclaimed by Lula," commented Ferrari.

Among experts in international trade and politics for the region, the feeling is nearly unanimous that the coalition led by Lula and his leftist Workers Party (PT) will mean deeper ties between Brazil and Argentina and amongst the four Mercosur nations.

Ferrari, who has ongoing contact with Lula’s closest collaborators, is confident that the bilateral relations – and therefore the relations within the bloc – will be a priority for the new president.

According to the expert, the 1985 Argentine-Brazilian integration treaties highlighted the complimentary nature of the two large economies, the strengthening of democracy, a shared stance in confronting external debt and the possibility of advancing in the economic modernisation process.

That was the agreement signed by then-president of Brazil, José Sarney (1985-1990) and his Argentine counterpart, Raúl Alfonsín (1984-1989).

But the spirit of those bilateral accords, in Ferrari’s opinion, was "adulterated" by the Asunción Treaty of 1991, which launched Mercosur.

Alfonsín’s successor, Carlos Menem (1989-1999), and his equal in Brazil, Fernando Collor de Mello (1990-1992), "made commercial exchange the priority" in order to boost exports and show immediate results.

Rivalries and asymmetries immediately rose to the fore, contributing, along with other factors, to a Mercosur in 2002 that seems to be on the verge of disintegration.

In a column published in the Argentine journal Archivos del Presente, former president Sarney maintains that "integration became synonymous with trade rivalry and was no longer perceived in its broader sense of political and strategic integration that had inspired it: a project of association among productive sectors and unity among peoples."

Mercosur was thus transformed into a "merely mercantilist" agreement, says Ferrari. The trade bloc diverged from the original idea and grew distant from the ambition to create a common market and a political platform from which to negotiate with the rest of the world.

Lula and his advisers have stated repeatedly their intention to deepen Mercosur and strengthen ties with Argentina, the first country that the former labour leader, now president-elect, will visit once he is sworn in Jan 1.

"The concepts and aspirations that gave rise to Mercosur are predominant in the political approaches of the PT and of Lula," said Ferrari. "The idea is to create a space that is not just the fruit of the market, but also a place from which policy decisions and political objectives can emerge," stated the expert.

This strategy, he says could be led by two personalities who may be chosen to head Brazil’s new foreign policy.

"If Lula opts for a policy different from that of Itamaraty (Brazil’s foreign affairs office) diplomacy, I think the candidate could be Marco Aurelio García, Lula’s main adviser on international affairs and friend of Argentina," said Ferrari.

But if the new president leans toward career diplomats, he might choose Rubens Ricupero – now serving as secretary-general of the United Nations Conference on Trade and Development – as his foreign minister. Ricupero is also friendly towards Argentina, but choosing him would mean losing an important leadership post at the UN.

García and Ricupero, says Ferrari, both look critically upon the process for creating the Free Trade Area of the Americas (FTAA), especially given the deep disparities between Latin America and the United States when it comes to market access.

Although Lula toned down his discourse and moderated his criticisms of the United States, he believes that if U.S. protectionist measures remain in place, the kind of FTAA Washington is pursuing will be no more than a sort of annexation of the entire region. If that is the case, Brazil will not agree to the hemisphere-wide agreement.

Lula prefers to beef up Brazil’s leadership role in the Southern Cone by extending its influence to Bolivia and Chile, two associate members of Mercosur that the new president will try to bring fully into the fold in more aggressive negotiations on tariff differences.

And that will be no small challenge. Although Lula won 61 percent of the vote in Sunday’s elections (in which casting a ballot was obligatory), marking his popular backing, he will be taking office in the midst of strong financial turbulence that could grow worse during the first few months of his four-year term.

Meanwhile, Argentina is beginning to show signs of a tenuous economic recovery after four years of deep recession. The two smaller Mercosur partners, Paraguay and Uruguay, are both in the midst of economic downturns.

According to the Institute of Brazilian Studies expert, Lula could turn into an "example of new leadership" – based on patient social construction from the ground up over many years – and achieve true transformations, beyond the political rhetoric aimed solely at winning elections.

TRADE-BRAZIL: To the Rescue of the Original Mercosur

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Oct 28 2002 (IPS) - The victory of Luiz Inácio Lula da Silva in Brazil’s presidential run-off vote Sunday could mark a turnabout for Mercosur (Southern Common Market), return to its original path of productive, political and strategic integration.
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