Brazilian President Lula da Silva has announced that he is preparing to abandon dollars and switch to yuan in trade with Beijing, implicitly acknowledging China’s dominance in relations with Brazil.
Photo: Frederico Brasil/ZUMAPRESS/SCANPIX
Valdis Bērziņš, “Latvijas Avīze”, JSC “Latvijas Mediji”
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When Brazilian left-wing politician Lula da Silva defeated Jair Bolsonaro, known as the “Tropical Trump”, in the presidential election last year, the leaders of the European Union did not hide their satisfaction. Unlike far-right Bolsonaro, Lula da Silva promised to protect human rights, the country’s democratic institutions and the Amazon rainforest, known as the “lungs of the planet”.
President Lula repeats the Kremlin’s rhetoric
Half a year ago, European politicians enthusiastically welcomed Lula da Silva, who won the Brazilian presidential election, but they were soon disappointed as Lula spoke hostilely about Ukraine’s response to Russian aggression, echoing the Kremlin’s rhetoric and urging Europe and the United States to cut off military and economic aid to Ukraine.
The Ukrainian government has officially invited Brazilian President Lula da Silva to visit Ukraine in order to “understand the reasons and nature of Russia’s aggression”, said the representative of the Ministry of Foreign Affairs of Ukraine Oleg Nikolenko.
“An approach that puts the victim and the aggressor on the same level, accusing countries that help Ukraine defend itself against deadly aggression, of promoting war, is incompatible with the real state of affairs,” he said.
Hopes were cherished in Brussels and other EU capitals that this year a trade agreement could be signed with the “Mercosur” bloc of South American countries, giving Brazil, Argentina, Uruguay and Paraguay access to the EU market on a reciprocal basis and thus reducing the EU’s dependence on the Chinese market.
EU diplomats are now concerned about Brazil’s stance on Russia’s war against Ukraine, which has been going on for 14 months, as well as Brazil’s failure to fulfill its climate and environmental promises. A confidential report says that EU foreign ministers are skeptical about the chances of reaching an agreement with “Mercosur” at the regular meeting of the Foreign Affairs Council next week, “Politico” publication admits. Reaching an agreement with the countries of the Mercosur group is a very important point in the EU’s plan to expand the communication network with its allies after Russia’s barbaric invasion of Ukraine. “Moving forward in the preparation of the EU-Mercosur agreement remains a very important task,” the document says, “but the EU must also increase investment in energy and digital.”
Brazil is economically dependent on China
German Chancellor Olaf Scholtz has emphasized the introduction of a fairer trade model in cooperation with Mercosur countries, with EU countries purchasing processed minerals from partners in South America for the production of batteries and electric cars. Such an approach would differ from China’s method of importing raw materials and rare earth metals from abroad to be processed in China and then exported to other countries. The document prepared by EU experts admits that the competition between EU companies and Chinese companies in the markets of third countries is very fierce.
China is Brazil’s largest trading partner. Beijing has invested billions in Brazil’s energy grid and agriculture. During a visit to China last week, President Lula accused the United States of fanning the flames of war in Ukraine and announced that he was going to abandon dollars and switch to yuan in trade with China. Analysts believe that this is a sign of China’s dominant influence in relations with Brazil. During his visit to China, Brazilian President Lula da Silva signed more than 15 cooperation agreements.
If President Lula’s goal was to position Brazil as a neutral country, as Indian Prime Minister Narendra Modi is trying to do, then his visit was not successful, as it became clear who is decisive in the bilateral relations between Brazil and China, notes the Spanish newspaper “El País”. In the past, President Lula has also tried to cast his country as a mediator, but his recent comments on Russia and China indicate a clear move towards Beijing away from neutrality. According to analysts, President Lula’s statements do not show Brazil’s strength as a regional power, but rather its huge economic dependence on China.
Spain activates diplomacy in Latin America
On April 19, Rupert Schlegelmilch, the EU’s chief negotiator in the trade talks with the Mercosur bloc, went to Buenos Aires to try to activate negotiations on concluding a trade agreement. This shows that after 20 years of negotiations, Europe has concluded that now is perhaps the last chance to reach an agreement on a closer alliance with the largest economies of South America. On April 25, Brazilian President Lula da Silva plans to arrive in Madrid to meet with Spanish Prime Minister Pedro Sanchez.
Spain is one of the EU’s biggest investors in Brazil and will take over the rotating presidency of the EU for half a year from July 1. Spanish Prime Minister Sanchez has announced that one of Spain’s priorities during the EU presidency will be strengthening political and economic ties with Latin American countries.
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