UPDATE 2-Bush, Lula agree to closer U.S.-Brazil ties

Fri June 20, 2003 07:58 PM ET (updates with Lula, State Department official comments)

By Randall Mikkelsen

WASHINGTON, June 20 (<a href=reuters.com>Reuters) - U.S. President George W. Bush, the son of an ex-president, and Brazil's Luiz Inacio Lula da Silva, his country's first president from the working class, agreed on Friday to seek closer ties despite deep differences.

They issued a joint statement after their first face-to-face talks since Lula was sworn in on Jan. 1, saying their governments will have regular, high-level, consultations on issues from counter-terrorism to aid for Africa.

"The United States and Brazil resolve to create a closer and qualitatively stronger relationship," it said.

The statement made no mention of the U.S.-led war on Iraq, which Lula strongly opposed, and Brazilian officials said the matter was not discussed.

Warming ties between the two have come as a surprise, and reflect U.S. hopes Brazil can be a stabilizing influence in Latin America as its democracy movement has been strained.

Most of the region suffered a recession in 2002, with Venezuela and Argentina hard hit by economic slumps and political upheaval.

Speaking to reporters after the White House meeting, Lula said relations between the hemispheric giants were poised to enter a new era, saying, "I think this meeting can establish a new framework in Brazil-United States relations."

Lula told Bush he wanted Washington to help fund infrastructure investments in South America. He said the region needed better ports, roads and railways.

Asked if Bush was open to the idea, Lula said: "I think he is going to help."

A State Department official, who was present, said Bush and Lula hit it off well. "This meeting could not have gone any better. I can't tell you what a positive atmosphere there was," the official said.

The countries announced joint initiatives including U.S. support for Lula's anti-hunger program in Brazil, cooperation on energy and fighting AIDS in Africa.

"Without any question, I believe that we can surprise the world in terms of the relationship between Brazil and the United States," Lula told reporters in the Oval Office, Bush at his side.

Brazil and the United States co-chair the Free Trade Area of the Americas talks, seeking a hemisphere-wide free trade zone by January 2005. The joint statement reaffirmed the leaders' aim to conclude negotiations on time.

Lula sounded an optimistic note on FTAA, saying, "I am convinced that we have the conditions in place to break down all the barriers, if we are patient and perseverant."

He repeated several times his invitation to Bush to come to Brazil and Bush said: "Yeah, I really want to."

(With additional reporting by Pablo Bachelet and Jonathan Wright)