Lula regains leadership in Latin America between lights and shadows

01/29/2023 at 08:33


The president of Brazil proposes a common currency with Argentina and an integration that runs into resistance

Then we go to the great thingwe want a Central Bank… A Central Bank for (Latin) America!” The former Uruguayan president Jose Pepe Mujica He received Luiz Inácio Lula da Silva at his home on the outskirts of Montevideo with joy but also his customary sarcasm. He celebrated the return to the Brazilian presidency of his friend, but subtly hinted at a certain skepticism regarding the size of the expectations of a regional integration like the one Lula has in mind. The VII Summit of the Community of Latin American and Caribbean States (CELAC) that was held in Buenos Aires once again breathed life into a forum that was on an artificial respirator. This would not have been possible without the presence of the Brazilian leader and his “open arms” policy towards a neighborhood disdained by Jair Bolsonaro.

Lula thinks of South America as a space of relative political autonomy, especially from the United States. The Mercosur, that Brazil has been promoted together with Argentina, the main Brazilian partner, Uruguay and Paraguay, should be the mainstay of this roadmap. Mujica recalled, in his conversation with Lula, that this agreement, forged over the years, is only partially fulfilled. It would be better, in his opinion, to put Mercosur into operation than to “make a common currency” to “defend the shared interest”.

The words of the veteran leader were heard as a footnote to the CELAC final document in which he praised unity and diversity and stressed the importance of preserve democratic institutions and natural and strategic resources. The member countries highlighted the importance of Latin America as a food power, demanded that the United States lift the trade embargo on Cuba and welcomed the first agreements reached by the Venezuelan government and the opposition during the dialogue process being held in Mexico with the sponsorship of Norwegian to manage the internal political conflict.

Lula’s presence was not enough to prevent sparks. Mexico, Venezuela and Colombia claimed the release of the ousted Peruvian president, Pedro Castillo. Chile repudiated the repression of the protests in that country and the violations of human rights in Nicaragua. Uruguay advocated greater trade opening. In a certain sense, the idea of ​​a harmonious CELAC does not correspond either with the final declaration of the summit, or with the internal realities of many of the countries. Lula himself knows that the Argentine-Brazilian harmony can end in December 2023 if the strategic partner is once again governed by the right.

Criticism and obstacles

“Lula’s return to the international scene as president was full of expectation, given the energy he devoted to foreign affairs in his previous two terms. Symbolically, it took place at a meeting of CELAC, the abandoned club of Latin American and Caribbean countries by Bolsonaro. If Brazil wants to be a regional leader at the height of its economic and demographic dimensions, it is evident that it needs to be in contact with its neighbors,” said the São Paulo newspaper Folha. “The opportunity, however, was wasted on rhetoric. Lula took with him an arsenal of outdated formulas and a retrograde discourseremains of the context of the administrations of the previous decade”.

The agreement between the EU and Mercosur appears urgent in the eyes of the Brazilian president

The president himself is already encountering obstacles in his policy. The holder of the mighty Federation of Industrialists of São Paulo (FIESP), Josué Gomes Da Silva, has just been dismissed for repudiating the coup attempt on January 8 on behalf of the entity. Gomes Da Silva shares with Lula an industrialist view of the economy with an eye on Latin America.

The EU and China

Faced with Mujica, as well as his Uruguayan colleague, Luis Lacalle Pou, Lula asked that country to temper its disagreements in Mercosur and expressed his commitment to ratify the trade agreement reached with the European Union before negotiating a similar treaty with China. For the Brazilian, “it is urgent and necessary“validate the pact with the EU, of 2019. “We are going to intensify the discussions & rdquor ;. The deal was left up in the air in part because of Bolsonaro’s climate denialism. The change of era in Brazil creates new conditions for negotiation. In fact, the CELAC final document expressed support for the Brazilian request to host COP30 in Belen in 2025.

Lula’s enthusiasm is supported by concrete numbers. LLatin American exports to the EU grew by 26% in 2022. The Economic Commission for Latin America and the Caribbean (ECLAC) has also warned that trade with China has slowed and it only represented 8% of regional exports, quite a novelty if one takes into account what has happened in the last 22 years. At the beginning of the new century, the exchange between Latin America and China was 12,000 million dollars, 0.6% of the regional GDP. In 2021 it reached 445,000 million (8.5% of GDP), setting off the alarm bells in the United States.