Brazil and Argentina Form United Front Against Chinese Invasion

Presidents Kirchner and Lula The recent Brazil-Argentina summit, with the master touch of Brazilian diplomacy, not only sent a clear political message of understanding between Mercosur main partners, but also evidence of that close coordination.

During Argentine president Cristina Fernandez de Kirchner visit to São Paulo the Brazilian government announced it was prepared to extend a US$ 600 million credit to Argentina for the purchase of aircrafts for the recently nationalized flag air carrier, Aerolineas Argentinas.

Financing for the operation would come from Brazil's Economic and Social Development Bank and the company to benefit from the future order, Embraer, Brazil's main air industry and one of the world's leading manufacturer of mid range commercial aircrafts.

Furthermore at the business leaders meeting in São Paulo, under the eloquent name of "Argentina's Week", two sectors which had been quarreling reached agreements, footwear and naval construction.

According to press reports from São Paulo, Argentine representatives from both industries "were most satisfied with the agreements" signed with their Brazilian counterparts.

"The objective now is to fight against the common evil, Chinese products which are sold at dumping prices" both in Argentina and Brazil.

"With bilateral differences back on the right track, we must address the outside enemy".

Argentine president and her Brazilian counterpart called on Friday, March 20, for speedier financing of joint development and commerce projects to help stimulate decreasing bilateral trade.

At the regional summit and a few days away from the crucial G-20 global summit in London, both leaders did their utmost to transmit a coordinated image.

Following a meeting at the all powerful São Paulo Industries Federation, FIESP the two leaders downplayed recent trade differences and emphasized the need to strengthen close links to help boost South American economies.

"We've designed a strategy for the finance protocol agreements to become active", said Mrs. Kirchner during the press conference that followed the closing of a trade seminar of Argentine and Brazilian businessmen.

"We've agreed that given current global conditions we must act with great intelligence so as to help finance infrastructure projects", added the Argentine president.

Bilateral trade between Mercosur senior members has plummeted in the last few months as the world recession advances worldwide.

Trade last year totaled a record 30.8 billion US dollars but in the first two months of this year has fallen over 40% and is below half the value of the same period a year ago.

Although Argentina and Brazil consider their relation as "strategic", Buenos Aires has complained bitterly about its neighbor's growing trade surplus, and different Argentine business sectors have requested government support and protection measures.

FIESP complained to the Brazilian government in February that the Argentine decision to demand non automatic import licenses on 200 products was hindering Brazilian exports of foot wear, textiles, while line home equipment, among other items.

Brazil proposed limiting some exports to Argentina, as long as those "spaces were not filled by Asian products".

However Brazilian president Lula da Silva minimized the disputes and called on business leaders from both countries to explore the "political and economic potential" of the strategic Argentine-Brazilian alliance in the framework of Mercosur.

Junior members of the South American trade block, Uruguay and Paraguay also claim they have been left aside by the strategic alliance, which limits their trade and conditions (politically) access to a special infrastructure development fund created to help the weaker economies.

"Brazil and Argentina will grow less fast this year but they will continue to expand", emphasized Lula da Silva. "Our economies must be the industrial locomotives for Mercosur and the rest of the continent", added the Brazilian president.

Argentina and Brazil will be participating next month in the G-20 summit at London representing Latinamerica together with Mexico.

Mrs. Kirchner criticized developed countries "for not detecting the crisis or not communicating the crisis they had detected", adding this is evidence of the need for deep reforms to the global financial system.



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