Latin American Business Community Skeptical of SAFTA

 
Brazilian President Fernando Henrique Cardoso successfully lobbied to move the meeting of the Council of Latin American Businessmen (CEAL) from São Paulo to Brasília to coincide with the South American Presidential Summit. But proximity to the summit did not diminish the criticism of these high-level business leaders for both Mercosur and the proposed South American Free Trade Area (SAFTA). Roberto Texeira da Costa, CEAL's president, summed up the group's position. "We're having day to day difficulties operating in Mercosur; imagine how it would be if this bloc were even larger," he pointed out.

Businessmen were excited by the prospects but skeptical about the financing for the infrastructure development that was presented as part of the summit declaration. The Brazilians were quick to argue that financing would come from the vast new market potential of Latin American products, including gas from Colombia, fertilizers from Peru and energy from Venezuela. Brazil especially would benefit from the new sources of raw materials and energy that improved infrastructure would bring.

Nevertheless, Brazil's National Confederation of Industry (CNI) continued its attacks on Cardoso through its coordinator of economic integration, Dr. Sandra Rios. Earlier, Rios had taken the Cardoso government to task for its foot-dragging in the FTAA negotiations. She reiterated this criticism after the Brasília summit, expressing skepticism about the timetable set up for SAFTA and stating that any delay was hurting Brazil's ability to take advantage of the markets offered by the FTAA. The CNI's executive director, José Augusto Coelho Fernandes, agreed, implying that the commitment to SAFTA was not well thought out.

In this as in many cases of fiscal and economic reform, Latin American and US businessmen have been disappointed by Cardoso. He offers the right rhetoric, but the business and international financial community has been less pleased with his record for action, despite Brazil's improving economy and its ability to finance its long-term debt at reasonable rates on the world's financial markets.