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CounterPunch
December
13, 2002
Brazil's Lula
Checks Bush
by ROGER BURBACH
Luis Inacio Lula da Silva, the incoming president
of Brazil, is demonstrating an uncanny ability to move forward
a progressive agenda while keeping his conservative antagonists
at bay. This was clearly demonstrated in his meeting with George
W. Bush in Washington on December 10. Pablo Gentili, an Argentine
international analyst at the State University of Rio de Janeiro
declares: "Da Silva reaped the support of the Bush administration
while making it clear that his government will set its own agenda
and priorities. He has an extraordinary capacity to build broad
support for his left-leaning policies in the face of domestic
and international adversity."
Before da Silva's arrival in Washington
key Republican Congressional figures, along with right wing conservatives
identified with the Reagan administration's bellicose policies
in Central America, were calling for Bush to take a tough stand
against the incoming president who is common referred to as "Lula."
They decried the new leftist threat in Latin America, asserting
a "Lula, Castro, Chavez axis" was in the making, referring
to Presidents Fidel Castro of Cuba and Hugo Chavez of Venezuela.
Lula had also been hit by international
speculators prior to his visit to Washington. Fearful that the
social policies advocated by the new government will adversely
affect Brazil's ability to make payments of its huge international
debt totaling $240 billion, the investment bank of J P Morgan
on December 2 down graded its rating of Brazil from "neutral"
to "negative." This shift led to a slide in the value
of Brazil's currency, the Real, and a slump in the country's
stock market.
As Francisco Meneses of IBASE, an independent
research institute in Rio de Janeiro, notes, "Lula before
coming to Washington positioned himself so that international
institutions and politicians like Bush would find it difficult
to go after him." The day after he won the Brazilian election
Lula declared that his number one priority when he takes office
on January 1 is to end hunger among 23 million Brazilians, approximately
one-seventh of the country's population. The campaign will be
accompanied by increased subsidies to poor families aimed at
keeping their children in school, by a fairly radical agrarian
reform program, and by significant government support for agricultural
cooperatives.
"By making the ending of hunger
his number one priority, Lula has inoculated himself against
many of his detractors," says Meneses. As an expert on agrarian
issues, Meneses has been participating in the planning meetings
for the government's campaign against hunger. He says the World
Bank along with the United Nations Food and Agricultural Organization
have already informally committed their institutions to spending
$5 billion over the next four years on the campaign against hunger.
Even the most orthodox international
lending institutions have been check mated by da Silva's announced
policies. Just days before Lula left for Washington, the head
of the International Monetary Fund, Horst Kohler, went to Brazil.
After meeting with Lula, Kohler proclaimed that the incoming
president "is a leader for the twenty-first century."
He even endorsed Lula's call for increased social spending and
lamented J.P. Morgan's downgrading of Brazil's investment rating.
One major area of discussion between
the Bush administration and Lula in Washington focused on the
Free Trade Area of the Americas (FTAA). Bush has made this agreement
the lynchpin of his Latin American policy, calling for all the
countries of the hemisphere (excepting Cuba) to begin reducing
trade barriers in 2005. Lula has repeatedly expressed reservations
about FTAA, asserting that it favors US domination of Latin America.
Lula positioned himself strategically
in the FTAA debate by meeting with regional allies before going
to Washington. As Marcos Arruda, a foreign policy consultant
to the incoming government notes, "Lula intentionally visited
neighboring countries before visiting Bush to make it clear he
would not grovel for US support and that Brazil has its own agenda
and interests in South America.' On December 2 Lula visited Argentina,
Brazil's leading partner in MercoSur, the regional trade block
that also includes Uruguay and Paraguay. Next he went to Chile,
an associate member of MercoSur. In his major address in Buenos
Aires Lula called for a strengthening of MercoSur "so we
can take control our destiny" and end "our dependency
on international currency flows." Lula, in Argentina as
well as Chile, asserted that MercoSur should take priority over
other trade agreements, and went on to call for a common currency
among MercoSur nations and the formation of a regional Parliament.
In Washington Lula was able to seize
the commercial high ground by pointing to a series of US protectionist
measures that actually run counter to authentic free trade. Approximately
25% of Brazil's exports valued at over $14 billions currently
go to the United States. Twenty of the leading products face
average US tariffs of 39%. If the trade barriers were removed
on just four products_orange juice, steel, meat and soy products--it
is estimated that annual Brazilian exports to the US would jump
by $2 billion.
Francisco Meneses of IBASE believes it
is doubtful that the talks between Lula and Bush will actually
lead to any significant reduction of U.S. trade barriers, particularly
on products like orange juice. "Bush's brother Jeb as governor
of Florida obviously has a stake in keeping out Brazilian juice
because of his alliance with local orange growers." Moreover,
Meneses worries that even the apparently favorable rapport between
Lula and George W. Bush will soon sour. "With Iraq and the
Middle East the administration has its hands full, it doesn't
want to create a crisis with the Lula government for now. Bush
is biding his time. He will wait for the inevitably deeper reactions
of domestic and international interests opposed to Lula's progressive
social policies before moving against the new government."
Roger Burbach
is director of the Center for the Study of the Americas. He co-edited
with Ben Clarke the anthology: September 11 and the US War: Beyond
the Curtain of Smoke, City Lights Books, 2002.
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