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Testing the Balance of Power in the FTAA These meetings are not necessarily low-key preludes to the Summit itself. They are important tests of strength in what appears to be a growing struggle between US leadership and Brazilian attempt to exert influence over the FTAA process and other countries in the region. At the moment, Brazil is scrambling to mend fences with its Mercosur partners as it tries to complete the integration of the Andean Community in March. Also in March, Mercosur will begin its fourth round of negotiations for a free trade agreement with the European Union, and discussions are advancing to complete South Africa's integration into the South American bloc (the South African president attended the Mercosur Presidential Summit in Florian�polis recently and signed the basic agreement to implement these negotiations). Mercosur is even pursuing trade talks with Mexico. These ventures have not been without criticism. Argentina is expressing concern over sharing too much of a good thing-the Brazilian market-without being confident of the benefits for Argentine exports. In Brazil too controversy continues over how best to approach the country's trade agenda. In a startling interview published on the Global 21 website (www.global21.com.br/entrev), Ambassador Samuel Pinheiro Guimar�es, director of the Foreign Office's Institute for Foreign Policy Investigations, discussed the possibility that Brazil will not join the FTAA. His comments were tantamount to saying that Brazil doesn't need the FTAA or even its Mercosur partners if they opt for the FTAA, and that Brazil should go it alone rather than enter a trade bloc run by the United States. Meanwhile, on another South American website (www.mercosur.com), the eminent Chilean economist Ricardo French-Davis emphasized the advantages for Chile of developing its relations with Mercosur regardless of a discrepancy over external tariffs and Chile's associate role. He cited the political importance of the alliance as well as the need to expand nontraditional, value-added exports within Mercosur and South America. (Chile sells ten times more value-added exports to Mercosur than it does to the United States). Echoing Guimar�es's comments on Brazil's status as an independent world trader, French-Davis predicted that Chile would continue to export its copper, salmon, fruit and other traditional exports with or without the FTAA. While Brazil tries to mend fences with its neighbors, infighting continues to be a problem at home. The latest dispute is over a move to take away diplomats' traditional role as the managers of Brazil's international trade policy. Debate has arisen over the need for a USTR type of organization-a separate trade negotiation superstructure, like the one in the US. Added to this debate is growing criticism of the Brazilian government's lack of effective support for export development. In a January 3, 2001 article in the newspaper Estado de S�o Paulo, economic columnist Rolf Kuntz complained that it is easier for a Brazilian business to buy US technology with an US Eximbank loan than it is for it to get export credit from the Banco do Brasil. The Brazilian government reacted by publishing statistics showing that official export credits increased significantly in the last year. However, much of these credits are concentrated in a few industries, principally in the controversial export of Embraer airplanes. (The high dollar value of these transactions skews the statistic even here in South Florida. The aircraft sales are the reason that Brazil is the major importer through the South Florida customs area, where deliveries are accepted by Embraer's US clients). The Brazilian government continues to face pressure at home while it tries to fend off a newly aggressive trade posture by the United States. However, with the Bush administration still in transition mode, it is difficult to imagine that the US will give any clear indication of its future trade policies in the months before the Summit.
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