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Brazil and Argentina Put a Show of Unity, But Trade Trouble Persists

Brazil and Argentina presidents met Wednesday in the border town of Puerto Iguazú, in the Argentinean side, to celebrate the strategic partnership born out of 20 years of toiling towards economic integration, but also to address more pressing issues such as bilateral trade and support for Argentina’s coming negotiations with the IMF.

The "Development, Justice and Integration" joint declaration signed by presidents Nestor Kirchner and Lula da Silva covered a wide range of issues from the "strategic partnership" to eradicating hunger and poverty, fostering democracy and ensuring respect for human rights.

The document describes the Argentina-Brazil alliance as "key" to the regional integration project, including "construction of the South American Community of Nations".

The two presidents agreed to "jointly lobby" IMF, World Bank and other global financial institutions "to avert the imposition of conditions that affect the capacity of governments to promote policies of growth, decent employment and social inclusion."

However Kirchner and Lula were unable to finalize a "competitive adjustment clause," which Argentina is demanding to temporarily shelter some of its manufacturers from an overwhelming influx of Brazilian goods.

After signing the joint declaration and a score of more specific bilateral protocols, Kirchner and Lula described the Wednesday summit as a "new historic landmark" and praised the "courage, statesmanship and vision" displayed by former presidents Raul Alfonsin and José Sarney, who launched, after decades of mutual suspicion and mistrust, the Argentina-Brazil special partnership with the Puerto Iguazu Declaration on November 30, 1985.

Both former presidents were special guests of Wednesday’s events.

"Brazil wants a strong, industrialized Argentina with robust technological capacity," said Lula adding that Brasí­lia supports Buenos Aires in its determination to include provisions ensuring continued economic and manufacturing growth in any agreement with the IMF.

"The stronger Argentina is, the stronger Brazil will be and the stronger Uruguay will be, the stronger Paraguay will be, the stronger Bolivia will be and the stronger all the other South American countries will be," highlighted the Brazilian President.

"Ours is a relation of equals, and our priorities the South American Community and Mercosur," underlined Lula.

President Kirchner said Brazil was "indispensable" for Argentina, both for integration purposes and strengthening bilateral trade, and in spite of the ups and downs, and periods of uncertainty, the "integration project remains and our governments have recovered the value of political principles."

"Integration does not mean a country expands its manufacturing and the other remains a supplier of agriculture commodities. Integration is two ways and must look for those areas that complement each other," added the Argentine president.

But in spite of the militant integration message, trade disputes mainly because of Argentina’s concern with Brazilian manufactured goods remain latent with peaks of sharp confrontation.

Last May, Argentina’s Deputy Secretary for Integration, Eduardo Sigal, said his country "needs" Brazil as a good trading partner on equal footing, but not at any price.

After introducing safeguards against the import of home appliances and other Brazilian products, Argentina proposed late last year working out with Brazil a system to address their "economies asymmetries".

Bilateral irritating trade disputes are longstanding and have intensified because Brazil now enjoys a comfortable surplus with Argentina, contrary to what happened during most of the nineties.

But even when Mr. Kirchner cannot ignore claims from his country’s manufacturers, he is unlikely to allow the issue to undermine relations with Brazil.

"Brazil-Argentina is the axis for the South American integration process".

Besides, the Argentine President needs to play a balancing act between Venezuela’s Hugo Chavez and his tempting affluent financial situation and nationalist ideology, – which is scheduled to become a Mercosur full member in early December in Montevideo -, and the more cautious, mature, respected Lula da Silva.

This article appeared originally in Mercopress – www.mercopress.com.

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