MEXICO-BRAZIL: Friendship and Rivalry Mark Presidents’ Meeting

By IPS Correspondents Reprint | | Print |

Diego Cevallos

MEXICO CITY, Sep 26 2003 (IPS) - Conservative Mexican President Vicente Fox met with his leftist counterpart from Brazil, Luiz Inácio Lula da Silva, to once again repeat pledges of friendship and cooperation, but with an underlying current of rivalry.

In the meeting, which took place during a 24-hour visit by Lula to the Mexican capital that ended Friday, the Brazilian president admitted that the two countries defend their own interests, but said ”we are seeking a common meeting-ground that will benefit everyone.”

The two countries, which together represent 61 percent of Latin America’s combined gross domestic product, have different views on the future Free Trade Area of the Americas (FTAA), of which Mexico is a staunch supporter, while Brazil has put up some resistance to the continent-wide free trade project.

The two countries also have different interests with respect to trade relations with the United States, which absorbs almost 90 percent of Mexico’s exports and is a partner with Mexico and Canada in the North American Free Trade Agreement (NAFTA).

Observers say that between Lula and Fox, who have known each other since 1996, there is also a silent dispute for leadership in Latin America and the Caribbean, and to see who will become the foremost spokesman for the region vis-a-vis the industrialised world.

Both leaders have made it clear that they would like a permanent seat on the United Nations Security Council for their countries, Latin America’s giants.

But both see eye to eye on the need for reforms of the Security Council, which currently has just five permanent members: China, the United States, Britain, France and Russia.

However, if that reform occurs, only one Latin American nation would be admitted as a permanent member of the Council.

”The differences between Mexico and Brazil in terms of geographic location, production systems and economic interests are obvious, but it is true that they share common values with respect to democracy and justice – although these are no longer novelties,” Héctor Lozano, an expert on international affairs at the National University of Mexico, told IPS.

In response to a question by journalists on the differences between the two countries, Lula said ”Brazil obviously has its interests, and without a doubt Mexico, as the important country that it is, has its own, but then again, we all have our own interests.”

In Thursday’s meeting, Lula and Fox signed an agreement on tax policy, and to crack down on fiscal evasion.

They also promised, as they have before, that at some point a free trade treaty will be negotiated between Mexico and South America’s Mercosur trade bloc, made up of Brazil, Argentina, Paraguay and Uruguay.

”I’m convinced that the audacity of our relations is what will press the developed world to be more flexible in trade negotiations, especially regarding farm products,” said Lula.

Brazil and Mexico both form part of the so-called Group of 22 (G22) developing nations, which played a key role in the fifth World Trade Organisation (WTO) ministerial conference held Sep. 10-14 in the Mexican resort of Cancun.

In the gathering, the G22 demanded that the industrialised countries begin to make real progress towards phasing out the enormous subsidies they provide their farmers. Due to the predominantly North-South deadlock on that issue and others, the meeting came to an abrupt end without any agreement.

While non-governmental organisations and World Bank officials have described the G22 as a powerful new actor on the global stage, official spokespersons in Latin American countries like Mexico and Colombia have stated that their nations are in the new alliance solely due to pragmatic reasons, and that they could withdraw at any time.

Observers say that due to pressure from the United States and their eagerness to sign bilateral trade deals with Washington, several Latin American countries may pull out of the new grouping.

One of the G22’s leaders is Brazil, among other reasons because it is a major agricultural producer at the vanguard of the fight for greater access to the U.S. and EU markets, which shell out more than one billion dollars a day in farm subsidies.

Mexico is also opposed to the subsidies, but unlike Brazil, it is not a major player in the arena of agricultural exports. Moreover, it has already signed free trade agreements with the United States and the EU, which allow it to export fresh produce and other farm products to those markets with greater ease.

According to official figures, between 1994, when NAFTA went into effect, and 2002, trade in agricultural products between the United States and Mexico rose over 100 percent, to 12.8 billion dollars a year.

But agriculture accounts for just six percent of trade between the two countries, which totals 200 billion dollars a year, twice the size of the bilateral trade flow seen a decade ago.

Meanwhile, Brazil, a country of 174 million, is involved in trade disputes with the United States on several fronts.

For example, orange juice exports from Brazil, the world’s biggest producer, pay a 56 percent tariff to enter the U.S. market.

And Brazil’s steel exports to the United States between January and April 2003 were 51.6 percent down from the same period in 2002, due to a number of trade barriers.

”At the level of governments and presidents, Brazil and Mexico can swear eternal love, but in reality there are interests that separate them,” said Lozano.

”There will be moments when we will see them on different sides,” he predicted.

But Brazil’s ambassador to Mexico, Luiz Augusto de Araujo, said that ”between Brazil and Mexico, there are more agreements than differences, which always exist.”

He mentioned, for instance, the two countries’ common positions on nuclear disarmament and the need to reform the U.N. Security Council.

In their meeting in Mexico, Lula and Fox pledged to work together to strengthen democracy and justice in Latin America, and to boost trade flows between their two countries, which amounted to just three billion dollars in 2002 – a small figure given that Mexico, population 100 million, and Brazil are the region’s two largest economies.

This week’s meeting between the two leaders was the third since Lula took office on Jan. 1.

The first took place in May, at a gathering of the Rio Group – the highest Latin American forum for political consultation and coordination – in Peru. The second occurred in Evian, France, where the two leaders were attending the summit of the Group of Eight (G8) most powerful countries.