Brazil seeks to rebuild Latin relations

By Steve Schifferes BBC News Online, Washington

Brazilian President Luiz Inacio Lula da Silva is calling on President George W Bush in Washington at a time when US-Latin American relations are at a low ebb.

Lula has already stepped onto the international stage

During the Iraq crisis, the failure of usually reliable allies like Mexico and Chile to support the case for war deeply dented relations between the US and the nations south of its border.

Now, the leader of Latin America's largest economy, Brazil, has come to Washington to repair the damage.

Although Lula was also an opponent of the Iraq war, Brazil holds the key to the Latin American relationship, and President Lula is relishing his role as a bridge between other nations and the giant in the North.

It represents the best opporutnity in many months to get hemispheric relations back on track former Clinton chief of staff Mack McLarty

His agreement is also crucial for the United States if it wants to proceed with ambitious plans to create a Free Trade Area of the Americas by 2005, linking economies from Alaska to Argentina in a single economic zone.

The Brazilian president will be accompanied by no fewer than 10 cabinet ministers, in the biggest Brazil-US summit since World War II when President Frank D Roosevelt persuaded Brazil to join the war effort.

It could mark a new phase in the relations between the Western hemisphere's two biggest powers.

"Brazil represents the biggest regional opportunity for the US, but also the biggest challenge," writes former Clinton chief of staff Mack McLarty in the Washington Times.

"(The meeting) represents the best opporutnity in many months to get hemispheric relations back on track."

'Anchor of stability'

Lula, who began life as a firebrand trade union leader, has matured into a highly respected manager of the Brazilian economy who has won plaudits from the International Monetary Fund and the World Bank.

Lula's domestic reforms have provoked trade union protests

He has stabilised the currency and promised to tackle Brazil's large public sector deficit while targeting spending on the reduction of poverty and hunger.

"There is a recognition of mutual interest on the part of the US in Brazil's success. Brazil can be a very large anchor of stability," said former US ambassador to Brazil Anthony Harrington.

IMF managing director Horst Koehler says that Lula is doing an outstanding job in managing the economy and he is "deeply impressed."

The United States is the largest investor in Brazil, with 400 companies and investments of $30bn (£20bn), and Brazil exports some $15bn (£10bn) worth of goods to the US.

But Lula would like to ensure greater access for Brazil's huge agricultural sector to US markets before agreeing to any trade deals.

And Brazil would like to strengthen Latin America's own regional trade pacts, like Mercosur (which binds Argentina, Brazil, Paraguay and Uruguay), before proceeding to a pan-regional deal.

Meanwhile, the US is pressing ahead with bilateral deals, and recently concluded a free trade pact with Chile.

Brazil's ambitions

Under Lula, Brazil is trying to assert what it believes is its rightful place as the economic and political leader of Latin America after years of economic crisis and political turmoil.

He told the Brazilian Congress he was carrying out reforms to "transform our nation into a developed country that conquers the place it should have already occupied in this globalised world".

And, speaking at this week's Mercosur summit, he promised to work every minute to consolidate the dream of Latin American unity.

Lula is hoping that, by presenting a common front, Latin American countries can win concessions on trade from the US.

Meanwhile, American policymakers are increasingly looking to Brazil for help in resolving some of the most difficult hemispheric issues - including the confrontation between US companies and Venezuela's Hugo Chavez, and the drug-trafficking issues in the Andes states.

Brazil and the US "have built strong, open relationships in the last few years," says Brazil's ambassador to the US Ruben Barbosa.

Despite their ideological differences, George Bush and Lula are both strong leaders with a down-at-home philosophy and a penchant for getting things done.

Now the challenge is to see whether Brazil can become the vehicle to rehabilitate the strained relationship between the US and Latin America.