MEDIA REACTION: WESTERN HEMISPHERE: MERCOSUL, BRAZIL AND

UNCLAS SAO PAULO 000160

SIPDIS

SIPDIS

STATE INR/R/MR; IIP/R/MR; WHA/PD

DEPT PASS USTR

USDOC 4322/MAC/OLAC/JAFEE

E.O. 12958: N/A
TAGS: KMDR OPRC OIIP ETRD BR
SUBJECT: MEDIA REACTION: WESTERN HEMISPHERE: MERCOSUL, BRAZIL AND
URUGUAY-US FREE TRADE; SAO PAULO



1. "Action In The Americas"

The lead editorial in liberal, largest national circulation daily
Folha de S. Paulo (2/28) commented: "Brazilian concessions during
President Lula's visit to Uruguay are in the right direction, but
should not be considered a solution for Mercosul's erosion....
Uruguay's threat of establishing a free-trade agreement with the US
is a mere symptom of a larger crisis. Not only a symptom, but also a
pretext because the chances of an agreement with the world's biggest
economy have narrowed since the Democrats resumed control of the
Congress.... The fact that Brazilian diplomacy has begun to act is
good news. The concessions to Uruguay are relatively as modest as
Uruguay's weight in the bloc is. What is of greatest interest to the
companies in Mercosul's four founding members countries is that the
region really works as a free-trade zone. It is up to Brazil to lead
in taking institutional actions aimed at reinforcing and
consolidating such an environment.... Brazil's responsibility,
however, goes far beyond that. The nation's awakening to foreign
trade has reduced the relative importance of Mercosul with regards
to Brazilian imports and exports.... Brazil lacks a comprehensive
initiative to make possible the opening of its market to
manufactured goods. The attempt to unite South American nations as a
tactic antagonistic to Washington's policy of establishing bilateral
agreements in the region failed. The growth of trade in the Americas
would have more chances of being realized with an agreement that
involved the US."


2. "Uruguay's Sorrows Persist"

The lead editorial in center-right national circulation daily O
Estado de S. Paulo (2/28) opined: "President Lula's visit to Uruguay
has been presented by his administration as a success. Ten days
before President Bush's visit to Montevideo, Lula would appear that
he has convinced President Tabar Vzquez not to sign a free-trade
agreement with the US. If that agreement were signed and ratified,
Uruguay could not continue to be a member of Mercosul due to
complete incompatibility with the bloc's norms.... President Vzquez
is aware that his nation is not among the priorities of Brazil's
foreign policy. And President Lula never concealed that Montevideo
is not among his main concerns.... The agreements Lula signed in
Montevideo would never compensate for the opportunities Uruguay
would have with a privileged trade relationship with the US....
Uruguayans were not convinced by Lula's discourse. If they will not
insist on a free-trade agreement with the US the reason for that is
simple and realistic: the powers the Congress attributed to
president Bush to negotiate trade agreements no longer exist."
McMullen