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Brazil: Rousseff and her trip to China

Article by Foreign Policy Centre

April 19, 2011

Firstly, these are situations beyond comparison. One is not more important than the other. They are simply different, with distinct natures and purposes.

Brazil is still learning how to deal with its main trade partner of the last 40 years, the USA, but we were already used to the North American modus operandi. Furthermore, within the cultural aspect, even when negotiations with the USA were extremely complicated, both sides understood the dynamics of the other very well.

Recently, when China took on this position (main trade partner), Brazil’s saw itself forced to understand the new formula for negotiation. From the Chinese point of view, we are an extremely young country that still doesn’t know what it wants or what position it wants to occupy in the world. However, Brazil continues to try and understand China. It isn’t difficult to find seminars throughout Brazil whose subject matter is understanding the Chinese.

Rousseff went to China to punch in and initiate a series of negotiations to mold and organize the way in which both countries trade with each other. First and foremost, Rousseff went to seek to understand the dynamics and the mode of operations that orchestrate the voracious Chinese appetite to purchase at breakneck speed everything we are able to offer.

Naturally, Brazil desires to not only be an exporter of raw materials but also of added value products, which is very difficult. The major problem with this is that the main items exported by the Chinese are precisely finished materials at prices impossible to compete with.

As masters at reverse engineering and without the Western notion of private property, labor or intellectual property rights, the Chinese make competition impossible and threaten to be the greatest roadblock in the future for trade negotiations between the two countries; All this without taking into consideration their lack of concern for the environment.

However, Brazil is predisposed to understand this problem and even agrees that there is no short-term solution. After all, things that don’t have a solution are already solved.

From this aspect, the second issue of importance addressed by Rousseff and the Chinese premier, Hu Jintao, is China’s eventual support for Brazil’s entry into the UN Security Council as a permanent member. The Chinese counter position is its desire for Brazil to anticipate its recognition as a world economy. Brazilian industry is against this, because it would make the antidumping case against China unfeasible.

In parallel to these two tangents on the agenda between the countries, other relevant issues achieved favorable outcomes. Embraer managed what it desired and will continue to expand its operations in Harbin; national pork meat production achieved a formidable market; and investment in Brazil, such as Foxconn, have an enormous potential to incentivize others.

Politically, the value of the trip was the expansion of the communication channel. Rousseff has made clear what Brazil expects of China and vice versa. We know what to discuss and what each other’s issues of interest are. China is, without doubt, a lever for our foreign trade. However, if we take too long to understand that the sizes are disproportional between both countries, we can be more negatively affected than benefitted.

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