MercoPress. South Atlantic News Agency

Lula da Silva: “US and Venezuela need each other”

Brazilian president Lula da Silva welcomed last week's entry of Venezuela into Mercosur and said regional integration is the main axis of his administration's foreign policy.

In an interview with the Financial Times admitted talking on several opportunities with Venezuelan president Hugo Chavez about the need to act in such a way that it doesn't create problems to other countries and leaders and emphasized that "Venezuela and United States" need each other.

"Venezuela's incorporation opens up new opportunities to pursue economic integration on the continent. Venezuelan oil resources enhance the prospects for funding infrastructure projects", said the Brazilian president who insisted in down playing concerns over the growing influence in the region of Hugo Chávez.

On the subject of Mr Chávez's anti-Americanism, the president said Venezuela and the US need each other. "One day I spoke to Bush and Chávez. I said this fight between you is very interesting. Venezuela could stop selling oil and create a delicate situation for the US. Bush could stop buying and do the same. But you both keep buying and selling."

Nevertheless, he and Néstor Kirchner of Argentina have talked to Mr Chávez to try to take the tension out of hemispheric relations. "I talk a lot with President Chávez about the need to behave in a way that doesn't create problems for other countries".

Regarding the recent crisis between Brazil and Bolivia over the expatriation of assets belonging to Petrobras, the Brazilian government-controlled oil group by Bolivia's natural gas industry, President Lula said he had been urged to take a more confrontational stance by rightwing critics but preferred "to let the dust settle".

The Brazilian conservative right wanted us to start a war with Bolivia," he says. "I preferred to negotiate and start looking for a solution. I never was nervous about the crisis. We need each other. Bolivia needs to sell gas to Brazil and Brazil needs to buy gas from Bolivia."

In the interview with the Financial Times Lula da Silva also announced Brazil will try to give new impetus to the struggling Doha round of world trade talks during the coming G8 St Petersburg summit.

"It is not possible that the presidents of the most important countries in the world can meet and the most important issue in the world not be discussed", said the Brazilian president.

The leaders of Brazil, India - heavyweights in the trade talks - and China will be attending a special meeting with G8 leaders on Monday morning. But the Brazilian president said a separate meeting could take place without Russia, which does not yet belong to the World Trade Organisation although it hopes to join soon.

"We have to do it, even if it's only for a two-hour meeting," Mr Lula da Silva said. "Our representatives at the negotiating table are snookered . . . so the leaders have to say whether they want [progress] or not."

Lula da Silva praised the stance of Tony Blair, British prime minister, Angela Merkel of Germany and George W. Bush of the US, who he said were sympathetic to an agreement under the Doha round. But he said President Jacques Chirac of France had "a much tougher position defending French farmers, and his position counts for a lot in Europe".

The Brazilian president reiterated the need for the US to reduce agricultural subsidies and the European Union to lower barriers to farm imports saying that such moves would form two legs of a triangle for progress, the third being access for manufactured goods to developing markets.

"I have told the other leaders, we have no problem in going to London, Berlin, Rome or Paris, wherever. Even if it's only for a two-hour meeting, we have to take a decision" because Doha offers the world's best chance of fighting poverty, inequality and even terrorism insists Lula da Silva.

However he admitted that electoral considerations were undermining the prospects for progress at the Doha round. "Because the problem is not economic, it's electoral. Leaders are thinking about the next election", he said. Mr Lula da Silva faces an election in October.

As to domestic policies and the oncoming presidential election Lula da Silva states that "I won't take any populist measures of the kind that you celebrate at night and regret the next day. I prefer caution and seriousness, because chicken soup and caution don't do any harm to anyone, much less a president of the republic".

Still Lula da Silva has been criticised by both right and left. A set of policy guidelines published last month by leaders of his Workers' party (PT) - including his closest advisers - explicitly calls for a "leap of quality" in a second Lula term. It argues for a shift away from "neo-liberalism" towards a different pattern of development and describes the administration's work as "partial, unequal and incomplete".

But the president says he will have none of this. PT has yet to finalize its programme for the next election and, as the candidate he will have to approve it when it does.

"What people don't see is this: when people talk about a new standard of development, in fact it is already happening. What do people really want? They want lower interest rates and they want more investment. This is already happening, this is already happening right now and it is only happening now because we have been planting this since 2003."

Asked what he has learnt in office Lula da Silva points out that "the important thing about governing is to have control over the machinery of government. In a country the size of Brazil, this takes time. In the first year you sow, to reap the results during the remaining years. We are in a period now that I would say was almost magical in Brazilian politics."