MercoPress. South Atlantic News Agency

Brazil tries to sooth strategic ally Argentina

Argentina “needs” Brazil as a good trading partner on equal footing but not at any price, said Argentina's Deputy Secretary for Integration, Eduardo Sigal.

However Brazilian Foreign Affairs minister Celso Amorim speaking from Paris indicated that the relation with Argentina "is the main priority" of Brazil's foreign policy and denied point blank Brasilia pretends to become South America's leader.

Having borders with ten South American countries, "we need a policy for the whole region", added Mr. Amorim, who insisted that "this in no way reduces the strategic importance and priority Brazil extends to its relation with Argentina".

Mr. Amorim underlined that Argentina and Brazil have many common and joint positions in several issues, particularly international trade and recalled that both countries belong to the Group of 20 in the framework of the World Trade Organization. Nevertheless he admitted that there could be some areas "where momentarily we have different visions".

Among those differences Mr. Amorim mentioned the approach towards Mercosur: while Argentina would like to see a greater integration emphasis inside the block; Brazil feels the objective should be a project of broader scope such as the South American Community of Nations, which also happens to be President Lula da Silva's obsession.

"We believe they are not contradictory projects, but rather issues that can move ahead together", highlighted Mr. Amorim who insisted there was no diplomatic rift between the two neighbours and blamed the press for publishing an alleged deterioration of bilateral relations.

"The majority of alleged Argentine criticisms I have never herd, rather I've read them in the newspapers".

Earlier in the day in Buenos Aires Mr. Sigal said that "we need each other. Brazil is also recovering, but we don't want it to be at the expense of Argentina's development. Further on he argued that "nobody can deny the importance of Brazil, its continental relationship with the ten countries it has borders as well as devising policies of continental and worldwide scope" but this can't be "for free" or "at the expense of the development of other countries" in the region. Brazil and Argentina, although politically allied in Mercosur have had continuous rifts regarding bilateral trade. Last year Argentina imposed safeguard tariffs on home appliances and other Brazilian exports to protect its industries. Furthermore in September Argentina proposed working out with Brazil a system of safeguards to address the "economic asymmetries" in the framework of their bilateral relation, but apparently to no avail.

Argentine Foreign Minister Rafael Bielsa on Monday complained the Brazilian government had not provided a "satisfactory response" to Argentina's proposal. Mr. Sigal in a radio interview said Argentina demands Brazil "treats her as a partner", but questioned Brazil's attitude. "We've agreed to be partners. What we don't agree to is saying 'yes, Brazil" to everything it devises or decides".

Buenos Aires analysts argue that longstanding trade disputes between the two Mercosur partners are not new, but Brazil now enjoys a comfortable surplus in bilateral trade, contrary to what happened during most of last decade when Argentina supplied oil and grains.

During the first four months of 2005 Brazil has accumulated a trade surplus with Argentina of 900 million US dollars, equivalent to almost half the whole surplus of 2004, virtually the opposite to what happened during the nineties.

"This may seem problems are worse, but they have been there for years and growing against Argentina because the two nations' economies are so different in size", said Argentine economist Eduardo Curia.