Page last updated at 08:36 GMT, Monday, 30 May 2005 09:36 UK

Brazil looks to its neighbours

By Sue Branford
BBC News, Brazil

Brazil is rapidly expanding its economic and political influence in South America, as well as forging ties with other developing nations elsewhere in the world.

In the past, Brazil - the only South American nation to speak Portuguese - felt isolated from the rest of the region, which is almost exclusively Spanish-speaking. Turning its back on its neighbours, Brazil forged close links with Europe and the United States.

South American and Arab Countries' Summit, Brasilia
President Lula recently hosted the first Arab-South American summit
But today Brazil is different. Now the country is governed by a former industrial worker - President Luiz Inacio Lula da Silva - who, unlike many of his predecessors, has never lived abroad. President Lula has said repeatedly that his main foreign policy goal is closer links with South America.

Talking to the BBC, Foreign Minister Celso Amorim explained: "If you look at the world today, it's a world of blocs. The US is a bloc in itself. Maybe China is a bloc in itself. But even a country as big as Brazil cannot be a bloc in itself. We need South America. And South America needs us."

As well as promoting closer political links with its neighbours, Brazil is becoming the dominant economic power, particularly over the smaller countries, such as Uruguay, Paraguay and Bolivia.

This policy is, however, creating some tensions. Argentina, once a richer and more powerful nation than Brazil, feels threatened. Anxious to prevent its economy being swamped by cheaper Brazilian goods, it is opposing Brazil's attempts to strengthen Mercosur, the regional trade bloc.

Brazil is particularly dominant in Bolivia, having a strong presence in two key sectors - gas exploration and soya farming. Brazil's oil company, Petrobras, is the biggest company in the country.

The current unrest, with popular movements demanding the nationalisation of the gas industry, has left Brazil in the novel - and uncomfortable - position of appearing as a "colonial power".

Political agenda

Brazil is also forging closer links with other developing nations in the rest of the world. Trade with China has grown sixfold since 2000. It is likely to expand even faster in the future.

We want a world that is more just, where every nation can compete more fairly
Brazilian Foreign Minister Celso Amorim
China will require larger and larger volumes of agricultural produce, particularly soybeans to feed its poultry and cattle, and Brazil is one of the few countries in the world that is able to respond to this demand.

In mid-May, President Lula hosted the first-ever Arab-South American summit, with heads of state and ministers from 33 South American and Arab League states meeting in Brasilia.

Although the Brazilian government played down the political significance of the event, it also turned down the US request to be an observer.

For it is clear that, along with the desire to forge closer economic links with other developing countries, there is a political agenda to the flurry of Brazilian diplomatic initiatives. Foreign Minister Celso Amorim puts it simply: "We want a world that is more just, where every nation can compete more fairly."

Political scientist David Fleischer, a naturalised Brazilian, explains: "Most of the industrialised countries, including the United States and the European nations, based their industrial revolution on capital accumulated from agriculture. That is what the developing countries are trying to do today."

We genuinely believe that in the end, both developing countries and developed countries would benefit from a more just world where poor countries are able to use trade to grow their way out of poverty
Luiz Felipe de Seixas Correa, Brazil's ambassador to the WTO
To do this, developing countries must export more agricultural goods. The main obstacle comes from the massive subsidies that both the European Union and the United States pay to their farmers. These not only make it very difficult for producers in the developing worlds to compete but also reduce artificially the price of commodities on the world market.

The Brazilian government says that these subsidies are illegal under the rules of the World Trade Organization (WTO). Its diplomats have won two important victories in the last year: the WTO has ruled that both the subsidies that the US pays to its cotton farmers and that the European Union pays to its sugar beet farmers are illegal.

Brazil's successes have won it enemies. Simon Michel-Berger from Copa-Copega, a lobby that represents Europe's 11 million farmers, accuses Brazil of providing unfair competition to what he says is Europe's more environmentally friendly way of farming.

"The question is whether such a model of agriculture that produces a commodity at such a low prices can really be sustainable?" he asks.

Brazil's ambassador to the WTO, Luiz Felipe de Seixas Correa, laughs. "People who lose cases always complain," he says. "We genuinely believe that in the end both developing countries and developed countries would benefit from a more just world where poor countries are able to use trade to grow their way out of poverty."

Brazil - The Gentle Giant Awakes is broadcast on Monday 30 May, 2005, at 0905 BST on the BBC World Service.

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