Mon, Nov 15, 2004 - Page 7 News List

Brazil-China ties anger industry group

RECOGNITION The Brazilian president's decision to recognize China as a market economy will do harm to the nation's economy, Industry Federation officials say


Brazilian President Luiz Inacio Lula da Silva took heat from industry this weekend for recognizing China as a market economy, the latest move in a deepening relationship between the two nations.

In return, Lula got a tacit promise from visiting Chinese President Hu Jintao (胡錦濤) to back Brazil's bid for a permanent UN Security Council seat as he seeks to raise the South American giant's international profile.

The two leaders hailed their accords as a "strategic association" between their countries.

"I heard with pleasure the encouraging words of President Hu about Brazil having a greater role in the international arena, particularly in the United Nations," Lula said at a state dinner late Friday.

"We understand that this is a favorable indication for Brazil to participate as a permanent member in the work of a reformed Security Council."

The two leaders had earlier said their nations should cooperate within the UN and the WTO, "with the aim of preserving the rights and interests of developing nations," Chinese sources said. Brazilian sources said it would be difficult for Beijing to explicitly support Brasilia's UN bid because Asian neighbors Japan and India have similar ambitions.

During the UN General Assembly in September, Brazil, Germany, India and Japan launched a united bid for permanent council seats.

The council has five permanent members with veto power: Britain, China, France, Russia and the US. Ten other nations are elected as non-permanent members for two-year terms each.

The Chinese president arrived here Thursday for a five-day visit aimed at boosting trade between the two countries.

Brazil began by recognizing China as a market economy, a prized status that Beijing had been seeking. In turn, China granted Brazil's meat industry access to its vast market.

"In our talks, Lula announced that he recognizes China as a market economy," Hu said. "I would like to express my gratitude for this declaration, which will enrich our exchanges."

Chinese officials had been pressing the issue for at least two days before Hu's arrival.

Brazilian Industry and Trade Minister Luiz Fernando Furlan said the 20-plus hours of negotiations between the two nations almost collapsed late Thursday.

"At first, the Chinese position was like a samba song with one note: `We are here to get the market economy status, period,'" Furlan said. "President Lula's position was that we had to have a balanced agreement or we wouldn't have an agreement."

Furlan said Brazil's beef and poultry industry was granted access to China's market, and Brazilian aircraft maker Embraer obtained a commitment for an order of at least 10 planes valued at US$200 million.

He added that China's pledge of special access to its market was a reward for the market economy designation.

"Chinese authorities told us that countries that recognized it from the beginning will have access privileges in the Chinese market and will be treated as priority friends," Furlan said.

Hu was treated to a feast of grilled Brazilian meats at Lula's presidential retreat, a taste of the products destined for Chinese markets.

Brazil is China's top trade partner in Latin America, and last year the Asian giant became the South American nation's third-largest trading partner, after the US and Argentina.

But Lula's recognition of China as a market economy drew fire from Brazil's powerful Federation of Industries in Sao Paulo, which warned that the designation would injure Brazil's own industry.

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