Lula launches diplomatic crusade to shore up hemispheric support

05/05/2003 - Source: <a href=www.latintrade.com>LatinTrade-Latin American Newsletters

While President Lula da Silva has been thrashing out his tax and pension reforms, battling state governors, party radicals and union discontent (all covered in this issue), he has not shied away from presenting a grand 'development vision'.

Sharply critical of his predecessor Fernando Henrique Cardoso for concentrating on economic regeneration at the expense of any broader goals, Lula has pursued a vision that ironically bears some resemblance to that of the dictatorship: a more independent foreign policy breaking with traditional adherence to US-backed positions.

In Lula's vision, Brazil asserts its leadership in Latin America and embraces globalisation in so far as it benefits the country. Lula's strategy for moving Brazil away from merely reacting to the US hemispheric cue ball is to thrust the Mercosul trading bloc to the top of his foreign policy agenda and deepen integration with South American neighbours. He set himself the task of meeting every political leader in the region, something he will achieve soon when the leaders of French Guiana, Guyana and Suriname visit.

Earlier this month, he signed a 'strategic alliance' with Peruvian President Alejandro Toledo, which is a blueprint for a free trade agreement with the Andean Community, the regions' other big trading bloc. He met Venezuela's Hugo Chávez, who has expressed a keen interest in joining Mercosul, on 25 April and meets Bolivia's Gonzalo Sánchez de Lozada and his cabinet on 29 April.

Stengthening Mercosul is a strategic priority for Brazil: a ballast against US unilateralism. Lula has been working to shore up support within the bloc ahead of Free Trade Area of the Americas' talks with the US. He sent personal letters to his counterparts in Argentina, Paraguay and Uruguay calling for a joint position on services, government purchases and investment.

The problem for Lula is that Mercosul is the centrepiece of his vision and it looks precarious: the bloc's future depends upon the outcome of Argentina's presidential election and if a new leader eschews Mercosul for closer ties with the US (see page 8). Uruguayan President Jorge Batlle, fresh from visiting Washington, is pushing for 'no more delays' in trade talks between Mercosul and the US. He visits Lula on 10 May.

Brazil is frustrated with Mercosul's trade spats, the most recent example being Argentina's decision to levy a duty on Brazilian sugar. This belies any common stance on agriculture before the FTAA. Brazil could be forced to start talking bilateral trade with the US after all.