A-list message, [A-List] Lula meets Bush

Fred Feldman

Lula Skilled at Checking Bush - For Now
Roger Burbach, Pacific News Service, Dec 13, 2002

Winning a sweeping victory in Brazil on a platform of
economic independence and the alleviation of hunger,
president-elect Luiz Inacio Lula da Silva recently met
President Bush in Washington, D.C. PNS contributor Roger
Burbach says Lula, so far, has shown considerable skill in
keeping conservatives at bay.

RIO DE JANEIRO, Brazil--Luiz Inacio Lula da Silva, the
incoming president of Brazil, is demonstrating uncanny
success, so far, in moving forward a progressive agenda
while keeping his conservative antagonists at bay.

Da Silva, commonly known as "Lula," met recently with
President George W. Bush in Washington, D.C. From here, da
Silva was looking good.

"Da Silva reaped the support of the Bush administration
while making it clear that his government will set its own
agenda and priorities," says Pablo Gentili, an Argentine
international analyst at the State University of Rio de
Janeiro. "He has an extraordinary capacity to build broad
support for his left-leaning policies in the face of
domestic and international adversity."

Two days after the meeting, Lula named a former FleetBoston
banker, Henrique Meirelles, to head Brazil's central bank, a
move many called a shift to the political center. But on
issues that resonated with a majority of voters -- hunger
and the proposed Free Trade Area of the Americas (FTAA) --
Lula is standing firm.

Before da Silva's arrival in Washington, key Republican
Congressional figures, along with right-wing conservatives
identified with the Reagan administration's bellicose
policies in Central America, were calling for Bush to take a
tough stand against the incoming president. They decried a
new leftist threat in Latin America, asserting a "Lula,
Castro, Chavez axis" was in the making, referring to
presidents Fidel Castro of Cuba and Hugo Chavez of
Venezuela.

Also prior to his Washington visit, Lula was hit by
international speculators who feared that his social
policies would hurt Brazil's ability to make payments on its
$240 billion international debt. The investment bank of J.P.
Morgan on Dec. 2 downgraded its rating of Brazil from
"neutral" to "negative." This shift led to a slide in the
value of Brazil's currency, the real, and a slump in the
country's stock market.

But before Lula's inaugural visit to Washington, he
positioned himself so that Bush, the politicians and
international institutions might find it difficult to openly
go after him. The day after he won the presidential
election, Lula declared that his No. 1 priority would be to
end hunger among 23 million Brazilians, approximately
one-seventh of the country's population. The campaign
includes subsidies to poor families aimed at keeping their
children in school, a fairly radical agrarian reform program
and government support for agricultural cooperatives.

By making the elimination of hunger a priority, Lula has
"inoculated" himself against detractors, said Francisco
Meneses, an agrarian expert at IBASE, an independent
research institute here. Meneses, who has been participating
in the government planning meetings, says the World Bank and
the U.N. Food and Agricultural Organization have informally
committed to spending $5 billion over the next four years on
the campaign against hunger.

Just days before Lula left for Washington, the head of the
International Monetary Fund, Horst Kohler, went to Brazil.
After meeting with Lula, Kohler proclaimed that the incoming
president "is a leader for the 21st century." He even
endorsed Lula's call for increased social spending and
lamented J.P. Morgan's downgrading of Brazil's investment
rating.

One major area of discussion between the Bush administration
and Lula in Washington focused on the FTAA. Bush has made
this agreement the linchpin of his Latin American policy,
calling for all the countries of the hemisphere (except
Cuba) to begin reducing trade barriers in 2005. Lula has
repeatedly expressed reservations about FTAA, asserting that
it favors U.S. economic domination of Latin America.

Before going to Washington, Lula positioned himself
strategically in the FTAA debate by meeting with regional
allies Argentina and Chile. Marcos Arruda, a foreign policy
consultant to the incoming government, says Lula was "making
it clear he would not grovel for U.S. support and that
Brazil has its own agenda and interests in South America."

There Lula asserted that MercoSur -- the regional trade
block that also includes Paraguay and Uruguay -- should take
priority over other trade agreements. Lula even went on the
offensive, calling for a common MercoSur currency --
something that would reverse Latin America's trend toward
using dollars.

In Washington, Lula was able to seize the commercial high
ground by pointing to a series of U.S. protectionist
measures that actually run counter to authentic free trade.
Approximately 25 percent of Brazil's exports, valued at over
$14 billion, currently go to the United States. Twenty of
the leading products face average U.S. tariffs of 39
percent. If the trade barriers were removed on just four of
them -- orange juice, steel, meat and soy products -- annual
Brazilian exports to the United States could jump by $2
billion.

But trade barriers may not fall quickly. Take orange juice.

"Bush's brother Jeb, as governor of Florida, obviously has a
stake in keeping out Brazilian juice because of his alliance
with local orange growers," says Meneses. He says even the
apparent rapport between Lula and George W. Bush will soon
sour. "With Iraq and the Middle East the administration has
its hands full."

Bush, Meneses says, is biding his time.

"He will wait for the inevitably deeper reactions of
domestic and international interests opposed to Lula's
progressive social policies before moving against the new
government."

Burbach directs the Center for the Study of the Americas and
co-edited with Ben Clarke the anthology "September 11 and
the U.S. War: Beyond the Curtain of Smoke" (City Lights
Books, 2002).