Brazil Says Solution for Global Crisis Is Free Trade and Competition

zzz Luiz Inácio Lula da Silva, the president of Brazil, is urging leading economies to complete stalled global trade talks warning that protectionism could tip the economic crisis into chaos.

"If the United States, Europe, Brazil close themselves, the crisis could become much bigger and produce chaos instead of a solution," Lula told industry leaders Monday in São Paulo during a visit by Jan Peter Balkenende, the prime minister of the Netherlands.

Brazil said last month it may challenge the legality of a "Buy American" clause in the US economic stimulus package at the World Trade Organization, or WTO.

Lula also intends to speak against global protectionism and for the completion of the WTO's Doha round at the Group of 20 meeting of leading economies in London next month.

"The Doha round was almost finished but we had elections in the United States and then India and politics dominated. Now, nothing stands in the way," said Lula. "The Doha round is more of a political than a financial decision."

The seven-year-old talks intended to further global free trade collapsed in July over differences between India and the United States on safeguards to protect farmers from a flood of food imports.

As a major commodities exporter, Brazil has been a key player in the Doha round and had hoped the G20 would honor a November pledge in Washington to avoid protectionism.

The United States Trade Representative warned on Monday there would be no agreement on the Doha round until other countries made stronger commitments to open their markets to US goods.

Lula frequently urges other countries to pour cash into anti-cyclical measures to help keep their economies afloat amid the global crisis but has himself refrained from massive public spending plans at home that would increase government debt.

"The solution to this crisis is more (free) market, more free trade and more competition – like the developed world always said over the past 30 years," underlined Lula da Silva.

However on a more sober tone Lula speaking at his radio program "Breakfast with the President" predicted that the Brazilian declining job market will begin to feel a difference later this month.

Brazil's manufacturing sector has been hard hit by the global slowdown with declining activity in steel, auto and aircraft industries leading to massive losses of jobs.

"I'm convinced and optimistic that we were the last (country) into the crisis and we'll be first out of the crisis," he underlined pointing out to the potential of the domestic market.

"Brazil is undergoing a slowdown not a recession, as most other countries" he added.

Mercopress

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