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By Luiz Inacio ''Lula'' da Silva

Luiz Inacio ''Lula'' da Silva is the president of Brazil.

-- Brazil is a great country, with more than 170 million inhabitants and an economy that is one of the 10 largest in the world. From 1930 to 1985, Brazil had extraordinary growth, but two decades ago it came to a standstill, worsening the profound social inequities that characterized our development in the 20th century.

It is true that from 1985 on, with the end of the military regime, and in 1988-89, with the new constitution and the return of free elections, a prolonged democratic cycle began in our country. But it is also true that the social crisis through which we lived during that long period -- the fruits of disastrous economic experiments -- ended up as a potential threat to democracy.

Some decisions on economic policies made our country even more vulnerable on an international level. Recent Brazilian leaders misread the international situation and believed that making our economy subordinate to the capital flows of international finance would bring about more advantages than difficulties. That did not occur.

Today we confront the necessity of attacking absolute poverty and misery that afflicts tens of millions of Brazilians. A change in the economic model cannot be made from one day to the next: It will take time, above all because we do not want to return to inflation and because we are firmly disposed to maintain a fiscal balance -- such as the municipal and state governments of the Workers Party always have had -- to respect contracts and to assure internal conditions that will be attractive for productive national and international investments.

In short, there will have to be a transition period, during which we will tolerate the limits placed by past policies on the Brazilian economy. At the same time, I am bound to initiate the economic, social and political changes desired by the almost 53 million who voted for me. In order to attain that, it is necessary to change Brazil's position in the world.

The priority of Brazilian foreign policy will be South America. We have a common border without any jurisdictional conflicts with almost all the countries of the region.

Several years ago, we created with Argentina, Uruguay and Paraguay the Mercosur project, which Chile and Bolivia later joined. This experience, which was initiated with great expectations, had a disappointing evolution. The enormous macroeconomic disparities between Brazil and Argentina thwarted the advance of Mercosur. Because of that, some proposed ending the project, or regressing to a simple free trade zone.

Our position is different. We want Mercosur to be something more than a customs union. We want it to be transformed into an area of convergence on the industrial, agricultural, social and scientific-technological fronts. And we want it to promote an effective cultural rapprochement, a union between our universities and research centers. In order to develop Mercosur in depth, we must count on solid institutions for the resolution of controversies and a new ministry that can bring about efficient political-administrative coordination and develop a strategic vision of integration.

I have proposed to the presidents of the region that we establish a Mercosur parliament to be elected directly by the voters of our countries. That way, our citizens can participate in the process of regional integration, empowering them and conferring institutional legitimacy.

Mercosur should achieve macroeconomic coordination among its central banks, a sine qua non in order to arrive at a common currency. It should also seek to attract other countries in the region. Among those of us who find ourselves separated through differences in customs tariffs, for example, we must create alternatives in order to go forward with the integration. As for the others, we shall have to rapidly undertake the building of common bridges.

A consistent and expanded Mercosur should possess a common foreign policy that will permit us to carry out an efficient dialogue with the European Union and the United States, above all in the negotiation process for the formation of the Free Trade Area of the Americas (FTAA).

The extension of our exports is fundamental in order to stimulate new dynamism within our system of production, as well as to balance our external debts. In this regard, the opening of a U.S. market for Brazilian products is essential.

These are the reasons for our interest in the creation of FTAA. Nevertheless, it stumbles upon three difficulties.

The first is related to the disparity between the U.S. economy and the ones in the rest of the hemisphere. If compensatory means are not established, these disparities will grow.

The second difficulty is the result of the non-tariff protectionist barriers the United States imposed that profoundly affect Brazilian exports.

The third is that the United States acts selectively when it proposes that some matters problematical to FTAA be discussed in the World Trade Organization (WTO). At the same time, the United States speeds up the discussion of more complex themes not yet resolved in the WTO in the FTAA. Our government wants to reexamine those problems. We will also be more active in the WTO, where matters of great importance are being decided.

Beyond these issues, Brazil will broaden its bilateral relations with South Africa, India, China, Russia, Mexico and other countries whose respective regions are important economically and geopolitically. With them, it will be possible to carry out common initiatives in multilateral agencies.

My government will work in reforming and strengthening the United Nations, which is forming a new configuration in its Security Council. This policy of democratization of multilateral agencies will be a constant of our foreign policy.

We want a more balanced world in the economic and social spheres, free of the threats of international financial anarchy that affects developing countries above all others. An act of solidarity beneficial to Africa is necessary, as part of a global effort in favor of peace and social justice. The battle against poverty and exclusion plays an important role in the war against terrorism and civil wars that tear apart so many regions in the world.

Finally, the struggle for peace is the absolute priority. For that reason, we lean toward a policy of disarmament -- above all, nuclear disarmament -- and we defend negotiated solutions to the conflicts that affect humanity today.

(c) 2003, Foreign Affairs en Espanol/Global Viewpoint. Also available in Spanish at Distributed by Tribune Media Services International.
For immediate release (Distributed 2/11/03)