New Argentina President Spells It Out: Brazil Is Priority Number One

Brazil's Lula and Argentina's Cristina Kirchner Argentine elected president Cristina Fernandez de Kirchner this Monday, November 19, will be visiting Brazil, her first overseas "official" trip, following on an invitation from President Lula da Silva and confirming that "Brazil is a priority relation for Argentine foreign policy".

Buenos Aires diplomatic sources quoted in the Sunday press said that the message from Mrs. Kirchner is very clear: emphasize bilateral relations with South America's largest economy and leave no doubts as to which is the strategic relation Argentina most values: Brasí­lia, which naturally leaves Caracas aside.

Lula da Silva first extended the invitation on the night he phoned Mrs Kirchner to congratulate her on her victory in the polls and again during the recent Ibero-American summit in Chile.

"Relations with Brazil are very good and the fact Brazil has been chosen as the first country to visit is symbolic," said Foreign Affairs minister Jorge Taiana who has been confirmed in that post in the incoming cabinet December 10.

Although Mrs. Kirchner actually first met last week with Chilean president Michelle Bachelet, – and had a long "woman to woman" talk -, it was in the framework of the Ibero-American summit and she traveled officially as First Lady.

"Brazil is and will be Argentina's priority relation to show the world, maybe even more than during the current administration of President Nestor Kirchner. We must not forget that during the first two years of President Kirchner they weren't (Kirchner and Lula da Silva) always on the same wave band", said an undisclosed member of Taiana's team.

"The reading must be first Brazil and maybe later (Hugo Chavez) Caracas," added the source. Cristina Kirchner will be traveling with Jorge Taiana who underlined that "we're going to review (with Lula) all issues".

Issues include bilateral trade, – close to nine billion US dollars -, establishing a new currencies system for trade, peso and reais instead of the US dollar, inflation which concerns many Brazilian corporations with investments in Argentina plus Mercosur cohesion and how to overcome internal cracks, be them economic or political.

"I believe that in the currencies issue we'll be able to advance at a good pace," said Taiana. However two thorny points remain in the Mercosur agenda to be addressed: Venezuela's incorporation to the trade block which still faces resistance in the Brazilian Senate and the Uruguay-Argentina dispute over the pulp mill which in the last few days seems to have worsened.

"We must avoid this dispute from conflicting with other Mercosur business and the region's image before the world," said a close source to Taiana.

Another interesting point in the tentative agenda to be considered is the "reindustrialization" of Argentina, an issue Cristina talked about with Lula during a previous visit to Brazil before her October 28 electoral victory.

Reindustrialization is a key word of the "productive" country scheme the Kirchners are pushing for which is based on developing local manufacturing and promoting domestic demand under the umbrella of a very favorable exchange rate for exports. Brazil on the other hand applies a strong local currency and high sensitive tariffs policies.

The incoming Argentine Economy minister Martin Lousteau, a brilliant academic with valuable political experience in the province of Buenos Aires has also written several books in line with the Kirchners "productive" project, but criticizing Brazil's policy in the region that allegedly has eliminated jobs in Argentina and re-directed investments to Brazil.



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