Brazil's 'Lula' to visit White House

The Mercury New-Knight Ridder Newspaperss Posted on Mon, Jun. 16, 2003 By KEVIN G. HALL and DUNE LAWRENCE

BRASILIA, Brazil - Brazilian President Luiz Inacio Lula da Silva will visit the White House on Friday for the second time in seven months, a sign of the growing importance of South America's largest economy and the growing international stature of its leftist leader.

Da Silva, a former machinist, labor leader and union organizer, initially frightened Wall Street and the White House with fiery populist campaign rhetoric. But since taking office Jan. 1, da Silva - known affectionately to Brazilians as Lula - has pursued his social agenda without challenging the free-market policies that brought Brazil billions in foreign investment in the 1990s.

By holding the line, Brazil has remained one of the most attractive markets for international investors, and da Silva arrives in Washington with a strong hand, even as much of Latin America is in an economic crisis. He also has a reputation for charm.

"Lula has a record of being quite effective in these personal appearances, and he still has an aura about him," said Thomas Skidmore, a longtime Brazil expert at Brown University's Watson Institute of International Affairs in Providence, R.I.

"It's pretty sensational that a former metal worker is flying around the world to negotiate with the strongest country in the universe."

U.S. and Brazilian diplomats expect the two leaders to disagree sharply on some issues but seek to highlight areas of agreement. As Celso Amorim, Brazil's foreign minister, said in Washington last Friday, "A mature relation means that you explore to the maximum the points of convergence, you try to limit the points of difference and you respect the diversity."

Bush and da Silva differ on Cuba and on U.S. military involvement in fighting drug-funded Marxist guerrillas in neighboring Colombia. They also differ on the U.S.-led invasion of Iraq, which Brazil opposed.

More important, da Silva wants Bush to drop tariffs on Brazilian steel, citrus and other agricultural exports as a condition for Brazil's assent to a hemispheric free trade zone by 2005. Brazil has been reluctant to endorse the so-called Free Trade Area of the Americas, which would reduce tariffs and barriers to trade, but Brazil and the United States are co-chairs of a final round of talks aimed at sealing the deal by 2005.

"Brazil and the U.S. are jointly assuming responsibility for leading the hemisphere toward free trade and integration," said Donna Hrinak, the U.S. ambassador to Brazil. "We're essential partners in the hemisphere."

Brazil insisted on several modifications to the official agenda for the Washington visit, a top Brazilian diplomat in Brasilia, the capital, told Knight Ridder on the condition of anonymity. One stipulation was adding an item called "fighting protectionism" to protest what Brazil complains is a U.S. trade policy that unfairly keeps out its exports.

The United States maintains that's not so, citing two-way trade that's grown from $15.6 billion in 1994 to almost $26 billion last year.

Brazil also insisted that a session on the "war on terror" be changed to "combating terror," and that the sessions include a discussion of the United Nations in resolving future conflicts. The changes were intended to voice da Silva's displeasure that the war in Iraq went ahead without a second U.N. resolution authorizing force.

Brazil also contends that it, or possibly India, should get a seat on the U.N. Security Council to represent large, important and democratic developing nations.

In a sign of Brazil's growing importance, not only are the presidents talking but top Cabinet officials also are set to meet.

"From what I understand, the United States has this kind of meeting with a very reduced number of countries. So we are interested. We think it's a very good opportunity," Amorim said. "It's also a very good opportunity for the two heads of government to speak freely and frankly and to increase their personal relationship."

The Brazilian official said the two countries' representatives expect to address

"hot spots," including ways to resolve Venezuela's political crisis, how to best promote democracy in Cuba and how to help Argentina out of its deep economic crisis.

The bulk of the meeting is likely to be devoted to free trade. All countries in the hemisphere except Cuba have been negotiating such an agreement since 1994, but Brazil lately has suggested that free trade with its closest neighbors might take priority.

Brazil may be disappointed again on efforts to remove U.S. trade barriers that keep out its farm exports and key commodities.

"The big question for the Brazilians is how can they make any progress on these urgent items like orange juice and steel," Skidmore said.

Brazil also is weighing a trade deal with the European Union, where it faces barriers similar to those in the United States. Global negotiations by the World Trade Organization seek to reduce trade barriers to farm products but appear stalled. Brazil is using the hemispheric trade pact as leverage in the global talks, and playing the United States and European Union off each other.

Trying to match Washington tit-for-tat, Brazil and its neighbors in the Southern Cone Common Market, or Mercosur, expect to sign a free-trade deal with Peru in August. The United States signed a free-trade deal with Chile on June 6 in Miami.

U.S. lawmakers from South Florida are pushing for the hemisphere-wide trade deal in hopes of capturing for Miami the secretariat that would administer any regional agreement.