Brazilian president Dilma Rousseff in her first overseas trip as chief of state ratified in Buenos Aires the “special strategic” relation with Argentina while her counterpart Cristina Fernandez de Kirchner, CFK, called for an “increased productive integration” between the two leading Mercosur partners.
“It was not a casual decision to pick Argentina as my first foreign destination,” said President Rousseff who added, “I’m here to promote our nations’ relationship and make it stronger than ever in both their commercial, political and cultural ties.”
Rousseff underlined the roles that Brazil and Argentina must play for the transformation of Latin America in the current century, “we are the two countries with the largest GDP in the region and we have a great potential that Latin America must take advantage off.” She mentioned specifically agriculture, energy and industry.
The Brazilian president, who was sworn in only a month ago, also talked during her five hours visit about joint undertakings with Argentina and mentioned the bi-national Garabí hydroelectric dam.
She also recalled former Argentine president Nestor Kirchner’s commitment to Unasur and the consolidation of regional integration through Mercosur, and mentioned the fact Argentina and Brazil, as members of the powerful G 20 are involved in the defense of the interests of Latin America.
Cristina Fernandez de Kirchner described the summit as a continuation of the commitment from their predecessors (Nestor Kirchner and Lula da Silva) “which marked an end to the existing differences between our countries and built for the first time a bilateral relation that has prospered and must be deepened.”
Further on she called for “greater productive integration” between Argentina and Brazil underlining that “our destiny and that of the region are indissolubly united to that of Brazil and vice versa, and from now even more.”
Mrs. Kirchner said that the current century is signaled by three different issues: food, energy to sustain economic growth and scientific development and the partnership with Brazil in the three areas is strategically crucial for both countries. “The world changed completely in 2008, and this offers the region a unique opportunity.”
Finally, the two presidents participated of the signing ceremony of several agreements referred to nuclear energy and biofuels, trade and called on the private sectors of both countries to have a more active role in promoting bilateral contacts and business.
The agreements include the construction of two hydroelectric dams and cooperation in the development of nuclear research reactors. The two dams are expected to generate 2.200 MW and will demand an investment of US$ 5.4 billion. There are also plans to further integrate the power grids and construct a bridge between the two neighboring countries.
President Rousseff in a special gesture towards Argentina’s human rights policy and her own government’s incipient approach to Brazil’s dictatorial past which remains locked to any revision by an amnesty law dictated by the military in 1979, met with members of the Mothers and Grandmothers of Plaza de Mayo associations.
More specifically on the agreements signed according to Buenos Aires sources, Argentina asked the Brazilian delegation to keep on the “mutual trade loyalty system,” which was agreed and signed back in 2005 by then presidents Luiz Inácio Lula da Silva and the late Néstor Kirchner.
Thanks to the system agreed, all those imports that might affect certain sector of the importer’s industry will be automatically limited by the exporter side in order to soften the impact.
Brazil is Argentina’s leading trade partner and main market for most of the country’s manufacturing exports. Bilateral trade in 2010 was over 30 billion US dollars with Argentina holding a trade deficit of 4 billion US dollars.
Brazil and Argentina, South America’s two largest economies, have vast areas of mutual cooperation . In 2000, there were around 50 Brazilian companies doing business in Argentina; today there are 250.
And in 2010, Brazilian direct investments in Argentina totaled US$ 5.3 billion, the largest of any country – even more than the US$ 5 billion that Chinese companies invested there.
Argentina will have presidential elections in October, with Cristina running for reelection but without the support of her husband who passed away at the end of last year. Argentina faces turbulence in its economy with energy supply problems and a lack of some goods on supermarket shelves. The government has been accused of falsifying inflation index numbers.
With the visit to Argentina, Dilma began her official travels as president – travels that will certainly take her to the other country-members of the Mercosur economic block (Paraguay and Uruguay).
Interview of Argentine Ambassador
According to the Argentine ambassador in Brazil, Juan Pablo Lohlé, 62, the fact that Dilma Rousseff decided to make Argentina the destination of her first international trip is “a significant political signal.”
Asked about the historical coincidence of both Brazil and Argentina being led by women at the moment, the ambassador said, speaking from his own experience, that being “commanded” by a man or a woman did not make a lot of difference.
Argentina does have more experience in this area than Brazil: Cristina Kirchner is the second woman to occupy the presidency. The first woman president of Argentina was Juan Perón’s third wife, Maria Isabel.
As his vice president, she succeeded him when he died in 1973; known as Isabelita, she was overthrown by the military in 1976. And, of course, there was also Perón’s second wife, Evita, who had been a powerful though controversial figure in the country until her death in 1952.
Ambassador Lohlé spoke of the importance of the Mercosur economic block and the need to “institutionalize” it further. He noted that Brazil and Argentina had an extensive area of cooperation in energy – nuclear reactors and hydroelectric power plants. And he made a point of emphasizing the difference between nuclear cooperation with Brazil and the controversial Iranian nuclear program.
The ambassador said it was possible that the two countries would work together on social assistance programs for low-income families. A low-cost housing program underway in Brazil, “Minha Casa, Minha Vida,” was a possibility in Argentina, said the ambassador.
As for the pre-salt oil fields, Lohlé said it was possible for both countries to build ships and oil rigs as Argentina had vast experience in naval construction . “We can form joint teams,” he declared.
As for trade, the ambassador stressed the quest for a “calm” relationship where disputes are negotiated. He said he believed bilateral trade could rise to US$ 40 billion annually (it is now at US$ 32 billion), and that there could be a greater integration of the two markets.
One problem, he said, was that at the moment goods from Argentina do not reach the Brazilian northeast – a huge area. “We can get there through cooperation in energy and food,” said Lohlé.
As for the automobile sector where progress has been slow, the ambassador called it a dynamic sector with its own rules. He pointed out that Argentina and Brazil could work together to reduce the importation of parts and substitute them with items made in Argentina and Brazil. “We can make more auto parts in Argentina, that is a fact,” said Lohlé.