| |
India-Brazil: Cementing the South-South
alliance
By Mario Osava
RIO
DE JANEIRO - Trade is the cement with which President
Luiz Inacio Lula da Silva aims to consolidate Brazil's
alliance with the other heavyweights of the developing
South. The three-day visit he just made to India marked
progress in that strategy, which is based on specific
economic interests and a shared attitude of pragmatism,
unlike the efforts made within the Third World of the
past.
The aim is to construct a "new trade
geography" in the world, said Lula, but stressed that
this does not mean playing down the "fundamental"
importance of exchange with rich countries. Instead, it
means creating new alternatives, reducing dependence,
and uniting developing countries to negotiate in equal
conditions all global or regional agreements, the
president said.
The outstanding result of Lula's
India visit was the signing of a market access treaty
that establishes tariff preferences between India and
the countries of Mercosur (Southern Common Market), made
up of Argentina, Brazil, Paraguay and Uruguay. Brazil's
Mercosur partners sent representatives as part of Lula's
retinue.
Within four months, the two parties to
the agreement will select the products that will have
reduced tariffs in bilateral trade, and decide on rules
of origin and dispute settlement mechanisms. The accord,
a first step towards future free trade, "inaugurates a
new era in South-South cooperation", said Lula.
Five other agreements - on cooperation in space
research, including the joint launch of satellites, and
on cultural exchange and tourism - were also signed in
New Delhi. More than a hundred Brazilian business
executives accompanied the president on his visit.
Negotiations with their Indian colleagues extended
through Thursday, as they explored the range of
possibilities for bilateral trade, investment and
technology transfer.
But trade between Brazil
and India today is relatively modest: just US$1.04
billion last year, or one percent of Brazil's total
foreign trade flow. However, it is growing rapidly, more
than doubling in the past three years.
Brazil's
minister of development, industry and trade, Luiz
Fernando Furlan, says bilateral trade could grow
five-fold in five years. An annual flow of $5 billion is
no exaggeration, he says, considering the size of the
two markets (Brazil has a population of 174 million,
India has 1.1 billion).
Fuel alcohol mixed with
gasoline is becoming more and more common in India,
which throws open the door for massive Brazilian exports
of this alternative fuel and the related technology. The
two countries are leaders in the production of
sugarcane, the raw material for alcohol, and over the
past three decades Brazil has developed an intensive
program for substituting gasoline with ethanol.
Brazilian firm Dedini transferred technology to India
last year that has led to the construction of alcohol
distilleries. There will be as many as 15 of these fuel
alcohol plants operating in India in two years,
announced the company.
Aircraft, footwear,
furniture and food could diversify Brazil's exports to
India, which are currently concentrated in crude oil,
soya, and iron ore. Imports from India are already quite
diverse, however, including diesel fuel, medications,
capital goods and chemical products.
Trade holds
a central place in the intensive diplomacy that Lula is
carrying forward, both in terms of strengthening the
national economy and firming up international alliances.
His top priority right now is to consolidate and expand
the Group of Three (G3), comprising of Brazil, India and
South Africa. The latter two have already received
visits and are negotiating trade agreements with
Mercosur. Lula will pay a visit to the next target,
China, in May.
Brazil's foreign trade is
currently concentrated in the United States and the
European Union, which absorb nearly half of the South
American giant's exports. But progress has been made in
the search for new markets. Argentina and China are the
second and third leading importers of Brazilian
products, surpassed only by the United States.
The Brazilian effort to multiply exchange with
countries in the developing world, which was begun with
Mercosur and is continuing in the negotiations for South
American integration, now extends to all continents. In
June, when Brazil will host in Sao Paulo the meeting of
the United Nations Conference on Trade and Development,
Lula hopes to launch the bases of the System of Trade
Preferences Among Developing Countries, an idea that
emerged in the 1980s but was never implemented.
The intensification of trade within the
developing South is accompanied by other demands from
these countries, or at least by the heavyweights, which
are seeking the democratization of international
relations. For example, Brazil, India and South Africa
are pushing for an expanded UN Security Council, in
which they would also hold permanent seats, today
monopolized by Britain, China, France, Russia and the
United States.
(Inter Press Service)
|
| |
|
|
 |
|
