Wed, Apr 11, 2012 - Page 7 News List

‘Currency war’ tops US, Brazil meeting

FEEL THE TENSION:Brazil’s Rousseff and Obama both acknowledged the need for the two countries to work together, despite strains over Iran and an air force deal

AFP, Washington

US President Barack Obama, right, and Brazilian President Dilma Rousseff meet in the Oval Office at the White House in Washington on Monday.

Photo: Reuters

Brazilian President Dilma Rousseff has voiced concern to US President Barack Obama that the easy money policies of developed countries threaten the growth of emerging economies such as Brazil.

The comments from the leader of Brazil, the world’s sixth-largest economy, came on Monday on her first visit to the White House — for talks that yielded little in the way of concrete announcements.

“Such expansionist monetary policies ... ultimately lead to a depreciation in the value of the currencies of developed countries, thus impairing growth outlooks in emerging countries,” Rousseff said.

Brazil is suffering from an appreciation of its currency, the real, against the US dollar, which the government blames on a “currency war” that has flooded the country with cheap US dollars generated by easy credit.

Rousseff welcomed the US’ improving economic picture and told Obama that Washington had a key role to play “not only in containing the effects of the crisis, but also in ensuring proper resumption of prosperity.”

“The BRICS countries currently account for a very substantial share of economic growth worldwide,” she said, referring to Brazil, Russia, India, China and South Africa.

“But it is important to realize and bear in mind that the resumption of growth in the medium-term future certainly involves a substantial resumption of growth in the US economy,” she added.

She later drove home the point in a speech before the US Chamber of Commerce, saying: “Brazil rejects all forms of protectionism, including ... exchange rate protectionism.”

Rousseff and Obama praised each other on the solid state of US-Brazilian ties, even if they said there was more to be done.

“The good news is that the relationship between Brazil and the United States has never been stronger, but we always have even greater improvements that can be made,” Obama said.

“I feel very fortunate to have such a capable and far-sighted partner as President Rousseff, so that not only Brazil and the United States, but the world can benefit from our deeper cooperation,” he said.

The two leaders said their talks were a good opportunity to exchange views ahead of a summit of the Americas in Cartagena, Colombia, this weekend, which they will both attend.

Rousseff’s visit comes more than a year after Obama’s trip to the South American giant, in which he tried to reset relations ruffled by differences with former Brazilian president Luiz Inacio Lula da Silva, particularly over Iran’s disputed nuclear activities.

Although Rousseff is regarded as less ideological than Lula, her government has resisted US-backed sanctions against Iran and Syria, which could be a sore point in the talks.

Another irritant is the US Air Force’s abrupt cancelation a month ago of a contract to buy 20 Super Tucano aircraft from Brazil’s Embraer, angering the South American nation, which is in turn weighing US, French and Swedish offers for the sale of 36 fighter aircraft.

Earlier, US Secretary of State Hillary Rodham Clinton and Brazilian Foreign Minister Antonio Patriota spoke at a day-long binational meeting of business leaders at the US Chamber of Commerce.

Clinton announced plans to open two new US consulates in Brazil — in Belo Horizonte and Porto Alegre — and said she would visit the country next week. The US currently has consulates in Rio de Janeiro, Sao Paulo and Recife.

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