Brazil should seek industrial upgrade, not US approval

By Xu Hailin Source:Global Times Published: 2019/3/20 20:58:40

Brazilian President Jair Bolsonaro ended his trip to the US by noting his visit was the "start of a part-nership for liberty and prosperity," but the result, however, will probably not be as he hoped.

Although Bolsonaro explained Brazil's concerns in his meeting with US President Donald Trump, Brazil cannot feel relieved as the deals lacked reciprocity. Inevitably, people may wonder if the US treats Brazil as an equal partner or is just taking advantage.

Trump vowed to support Brazil's membership of the Organization for Economic Co-operation and Development, but in return, Brazil has to waive the rights it enjoys in the World Trade Organization (WTO) as a developing country. 

Trump didn't know what Brazil really needed, and he probably didn't want to figure it out. The South American country began deindustrialization when its industrialization process was not complete. This led to decreased competitiveness for the country as a big exporter of commodities, as Brazil was unable to do primary processing. For example, Brazil produces the world's finest Arabica coffee beans, but due to its poor coffee roasting technology, the beans have to be processed in third countries before they are exported, which cuts the profits of exporters. 

What Brazil needs is not the status of a developed country, but to export more goods to the US and receive more investment from US companies. To develop its industry, Brazil also needs to improve its labor productivity, which is the key factor. Bolsonaro's efforts to reform the social security system are on the right track for that goal. 

Brazil is a developing country but its social welfare rivals that of some developed countries. The Brazilian government's annual welfare cost has burdened the country and many are too pampered to be willing to work hard. By solving this problem, Brazil can create a better environment for foreign investment, but it won't be an easy task. It depends on the determination of the president and the government as well as the support of the people.

In this aspect, China is not obstructing Brazil's reform, but is supplying an economic impetus on which Brazil can rely. When some US officials on Monday said Chinese investments are harming Brazil, the Brazilian economy minister Paulo Guedes said that Brazil will not reduce its trade with China. 

The US emphasized the risks of using Chinese tech giant Huawei's devices but failed to remember that the Chinese company has provided reliable telecommunications services in Brazil for years and enabled the Brazilian economy to keep up with the global technological trend. 

Washington highlighted the far-right label of Bolsonaro to put him on the opposite side against Beijing. But the Brazilian president himself said he doesn't take China as a rival during his meeting with Trump in the Oval Office. After all, Brazil's economic development needs are totally different from what the US demands of Brazil.

The US still to some extent sees Latin America as its own backyard. However, the situation in the region is different from that of the past. The US can no longer make Latin America and Caribbean (LAC) countries do whatever it wants. The influence of Washington in the region is now decided by to what extent it helps LAC countries thrive.



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