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PETRAS ESSAYS IN ENGLISH 

September 29, 2003

Brazil and the FTAA

James Petras
Rebelión

The best way to understand Brazil's position on the FTAA is to began by examining the key policymakers involved in making foreign economic policy. The president of the Central Bank is Henrique Meirelles, former president of Fleet Boston Global Bank, an orthodox neo-liberal with excellent working relations with Wall Street. The Minister of Finance is Antonio Palocci a former Trotskyist, who has converted his former dogmatic leftism to embrace "free market" doctrines. The Minister of Commerce Luiz Fernando Furlan is a millionaire owner of an agro-business enterprise - and practitioner of neo-liberal policies. The minister of Agriculture is Roberto Rodriguez who was the president of the Brazilian Agro-Industrial Association is an ardent advocate of genetically modified crops and close collaborator with Monsanto, the US corporate giant. On September 25, 2003 the Lula regime legalized genetically modified soybeans. The Foreign Minister, Celso Amorin, is another former Marxist who has moved to the right and is working closely with the US Trade Commissioner Zoellick in co-chairing the FTAA preparatory commission. President Luis Inacio Lula da Silva, the ex-metal worker (almost a quarter century ago) himself has converted to the free trade doctrine. Leading off the UN General Assembly meeting in September 2003, he attacked the protectionism of the industrialized countries and defended the thesis that protectionism is the greatest obstacle to the development of the world's productive forces and those who do practice protectionism would gain much more with the dynamic of a global economy based on real and complete liberation of trade (La Jornada, Sept. 23, 2003).

The Lula regime's strategy is to promote its competitive agro-export producers and to secure unfettered access to US and European markets, especially in citric products and soy beans - a multi-billion dollar business. To this end Lula has definitively shelved any serious domestic agrarian reform, settling only 2,000 families in the first 9 months in office, a tenth of the previous regimes, a thirtieth of his once promised 60,000 families and one sixtieth of what the MST (Landless Rural Workers Movement) demands.

US corporate farmers in the West and South have powerful voice in Washington and resist any lowering of trade barriers and subsidies, and the Bush Administration relies on their political support.

In order to counter-act the US resistance to what Lula calls a "real and complete" free market, the Lula team has formulated a strategy of collective pressure via coalitions with other countries. At the Cancun meeting of World Trade Ministers (September 2003), Brazil spearheaded the opposition of "The 21", (Third World countries - including China, India and South Africa) demanding the end of US and EU trade subsidies and anti-dumping regulation. Brazil took the leadership at Cancun and gained leverage for its own bilateral negotiations with the US, to further agro-export interest under the banner of "anti-globalization". In fact Lula's policy was to promote symmetrical neo-liberalism, and had no interest in defending small farmers producing for the local market. The second strategy of the Lula regime is to strengthen and expand MERCOSUR (the regional economic integration group which includes Argentina, Uruguay and Paraguay to include Bolivia, Chile, Peru and Venezuela) not as an alternative to FTAA but as a tool for strengthening its international negotiating position in relation to North America (Financial Times, August 26, 2003, p.3). The third and related strategy is to engage in bilateral free trade agreements with other Latin American countries in order to secure markets and present the US with a very lucrative opportunity to gain a variety of open markets if the US is willing to really drop its protectionist policies. Brazil is not building an alternative integration system excluding the US per se, but is trying to force the US to liberalize and provide trading opportunities for the agrarian elite which is the backbone of Lula's export growth strategy. US business interests and Trade Commissioner Zoellick are intent on securing a "broad and comprehensive" trade, investment, services, and intellectual property rights agreement while shoving the issue of US agricultural protectionism off the agenda and having it dealt with in the Doha round (Financial Times Sept. 24, 2004).

The US wants to both totally dominate Latin American finance, industry, services and research (recolonizing the region through a set of regulations controlled by the US) and protect its uncompetitive agricultural and manufacturing sectors. Brazil, with its own powerful agro-industrial corporations is trying to pressure the US by building coalitions which offer greater opportunities to secure FTAA passage but on condition that their own bourgeoisie also benefits. In November, Brazil and the US will co-chair a meeting to push for a FTAA agreement in 2005. The US has succeeded in pushing the issue of farm subsidies off the negotiating table and the US has forced Brazil to agree to bilateral free trade talks between the US and MERCOSUR in the context of FTAA.

Progressives and NGO's who saw Brazil's leadership of "The 21" at Cancun as part of an anti-globalization movement are completely mistaken; the Brazilian policymakers, policies and alliances are neither anti-globalization and even less anti-imperialist. The notion that Brazil's promotion of MERCOSUR is an alternative to the FTAA is also a mistaken notion, Brazilian leaders see it as a means of pressuring the US to secure advantages for local agro-export elites within the FTAA. The Brazilians will certainly bargain and insist on concessions against a US regime that wants it all - free flow of investments and control of Latin America and protectionism at home.

Opposition to the FTAA comes not from the Da Silva regime of neo-liberals but from the great majority of Brazilians. In an informal referendum in 2002, 11 million Brazilians voted and 95% were against the FTAA. The leading social movements, like the MST, trade unions, the progressive sectors of the Church, Marxist parties and dissident radical members of the PT are spearheading the campaign of opposition. They represent the real alternative to neo-liberalism at home and via the FTAA.

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