"U.S. May Not Like Next Brazil Chief": Associated Press

["Fred Feldman" <ffeldman@xxxxxxxxxxxxxxxx>]

October 5, 2002
U.S. May Not Like Next Brazil Chief
By THE ASSOCIATED PRESS


Filed at 2:48 a.m. ET


WASHINGTON (AP) -- The United States has a long history of
getting along poorly with leftist leaders in Latin America,
a tendency that could be put to a test soon in Brazil.
Fidel Castro of Cuba, Salvador Allende of Chile and Daniel
Ortega of Nicaragua represent a partial list of radical
leaders against whom the United States has directed its
wrath either overtly or covertly during the past few
decades.

On Sunday, Brazilians are expected to vote overwhelmingly in
support of Luiz Inacio da Silva, universally known as
``Lula,'' as their next president. He is a leftist and the candidate of
Brazil's Workers'
Party. His election would almost certainly complicate
President Bush's dream of a hemispheric free-trade agreement
by January 2005.

The administration has maintained a studied silence about
the election on grounds that any comment would be seen as
interference. Lula counts Castro and Venezuelan President Hugo Chavez
among his friends, and he opposes American military support
for Colombia.

On Thursday, a group of House members expressed grave
concern about Lula's policies on nuclear weapons. They cited
a statement last month in which Lula said the nuclear
Nonproliferation Treaty ``would make sense only if all
countries that already have nuclear weapons also gave them
up.''

Lula says the proposed hemispheric free-trade agreement, as
presently contemplated, would amount to ``annexation of
Latin America by the United States.'' The agreement, he says, would only
become viable
``when all countries have equal opportunities and conditions to become
competitive.''

Peter Hakim, president of the Inter-American Dialogue, a
policy group, is worried that international jitters
resulting from a Lula presidency could lead to ``an
Argentine-style collapse'' in Brazil and the ``possibility
of a contagion effect throughout Latin America.'' The impact would be most
severe on such countries as Chile, Peru and Bolivia -- all dependent on
Brazil as an export market, he says.

Hakim says Lula, assuming he is elected, can help calm
markets by what he does in the run-up to the Jan. 1, 2003,
inauguration and his first few days in office, particularly
his appointments to head the Central Bank and the finance ministry.

Brazil, which has the world's ninth largest economy, has
seen its currency plunge to record lows over financial
market concerns about what a Lula presidency would bring.
The currency slide came even after the International
Monetary Fund sought to bolster market confidence by
authorizing a record $30 billion loan for Brazil last month.

With international communism no longer an issue, the days of
American-sponsored efforts to oust Latin American radical
leaders are over. Friendly U.S. ties to a Brazil under Lula are unlikely,
but
a cooperative relationship is not out of the question.

Hakim believes that worst-case economic scenarios can be
avoided if Lula pursues a moderate course and Washington
shows a willingness to work with him. Market nervousness would dissipate, he
believes, with a few
words of confidence early on by Treasury Secretary Paul
O'Neill. ``That would be reassuring and markets would put up new
money without worrying that the whole thing is going to collapse,'' Hakim
says.

Mark Falcoff of the conservative American Enterprise
Institute predicts dark days ahead for Brazil. He believes Lula will replace
the market-soothing rhetoric of his campaign with a radical tilt as
president. There will
be a year of relative calm in Brazil -- ``then chaos,'' he says.

Falcoff sees little hope for close U.S. ties with Brazil
regardless of who wins the election. Brazilians, he says, ``find their
national identity in
opposing U.S. initiatives.'


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