BUENOS AIRES -(Dow Jones)- Presidents Luiz Inacio Lula da Silva of Brazil and Nestor Kirchner of Argentina signed a series of agreements Thursday aimed at deepening the relationship between the two countries and strengthening their shared position in multilateral negotiations over trade and economic policy matters.
Among the documents signed during Lula's visit to Argentina was the much- anticipated "Consensus of Buenos Aires," a series of 22 statements of principle in which the two presidents outlined their shared positions on various economic, development and trade priorities. Also signed were an agreement on antitrust measures, a memorandum of understanding creating a commission to monitor bilateral trade trends, a commitment to reduce red tape, a declaration over water sources and poverty, modifications to bilateral cross-investment rules and a commitment to exchange information on trade in illicit arms.
The Consensus of Buenos Aires document had earlier been billed as a potential counterpoint to the Washington Consensus, a laissez-faire set of market-focused economic policies that was influential in Latin America in the 1990s. In the end, however, the statement signed Thursday reads more like a set of broad principles than any direct rejection of past ideas.
The first clause of the Consensus says "we reaffirm our will to intensify bilateral and regional cooperation to guarantee to all our citizens the complete enjoyment of their fundamental rights and liberties, including the right to development, within a framework of liberty and social justice."
However, the underlying intention appears to be building solidarity between the two countries and attracting support from other developing nations within Latin America and elsewhere. It seems aimed at strengthening their bargaining position in multilateral forums such as the International Monetary Fund (news - web sites) and stabilizing their economies against volatile global economic trends.
"Greater autonomy of decision-making will permit us to confront more effectively the destabilizing movements of speculative financial capital and the countervailing interests of the developed country blocks, amplifying our voice in diverse forums and multilateral organizations," says clause 16. "In this sense, we emphasize that South American integration should be promoted in the interests of all, holding as an objective the goal of conforming to a model of development in which growth, social justice and the dignity of all citizens are associated."
The agreements come after the failed trade talks at the World Trade Organization meeting in Cancun. At those talks, an initiative backed by Brazil and Argentina - the two biggest members of the South American trade group Mercosur - to create a developing country negotiating block known as the G-20 group was undermined by the later departure from that group of other Latin American countries wooed by more attractive U.S. offers.
Some analysts have seen the creation of the Consensus of Buenos Aires as an effort to overcome that failure by affirming a like-minded economic position that will be politically attractive for other Latin American countries.
The Consensus document also places considerable emphasis on education and information technology.
"We recognize that our common aspiration to development implies giving absolute priority to education as a tool for social inclusion," the document says.
It makes a commitment to "construct an information society" and to "develop the infrastructure needed, in a manner in which all citizens and businesses, especially the smallest, are in conditions to participate actively in the advantages offered by the information society."
The document also dealt directly with the U.S.-backed negotiations toward a Free Trade Area of the Americas. It promoted the use of Mercosur to ensure FTAA recognizes different responsibilities for the region's developed and developing countries.
"We agree in the disposition to continue participating from Mercosur in the negotiations for the Free Trade Area of the Americas, with the objective of achieving an accord that's balanced with respect to the dissimilar interests of the participants and which endows the process with the flexibility needed to permit the negotiations to develop in conformity with the situations of each country and block involved," the document says.
The separate trade monitoring accord comes as an advance on a previous MOU between the two countries to work toward an instrument that would provide redress to either side when economic trends produce distortions in the bilateral trade balance.
However, beyond the creation of a committee to monitor trends, the possible trade instruments that could be applied in such cases remain undefined.
According to the accord, the commission will be coordinated by Brazil's Executive-Secretariat from the Ministry of Development, Industry and International Trade and by Argentina's Secretariat of Industry, Trade and Small and Medium Businesses.
The committee will "consider timely cases of sudden changes in imports, with a view to comprehensive evaluation of the situation for specific products" and " will examine, immediately, the issues and presentations of both sides."
"When necessary," the accord says, "the commission can make joint executive recommendations for the consideration of the governments."
The focus on this issue of distortions in the trade balances comes after expressions of concern among Argentine producers over an influx of lower cost Brazilian goods over the past few months.
Meanwhile, as foreseen in a communique from the Argentine Economy Ministry Wednesday, the antitrust agreement focuses on the exchange of information and technical cooperation designed contain monopolistic trends.
In a speech to businessmen after meeting with Kirchner and signing the various documents, Lula said he had come to Buenos Aires "to reaffirm my commitment to the friendship between Argentina and Brazil," calling it "an alliance based on mutual respect and a commitment to economic development and social justice."
Lula called for further integration in infrastructure, including in telecommunications, airports, energy and agriculture. He also said that in his meetings with Kirchner, the pair had agreed on closer "day by day" consultation on various matters.
In offering an example of Brazil's efforts to promote better integration and cooperation, Lula reminded his audience that his government was seeking to enable Brazil's National Development Bank, or BNDES, to extend lending to Argentina for infrastructure projects. It has been previously reported that the bank is considering making loans of up to $1 billion if Brazilian lawmakers agree to change the bank's statutes.
Lula also called for the two sides to continue "working closely together" on trade negotiations - including in FTAA and WTO forums.
"We must work for free trade that is fair and balanced...and that delivers prosperity for all our people," he said.
Meanwhile, Lula echoed Kirchner's call for businessmen from the two countries to overcome what they both called "minor problems" so as to "allow us to focus on our strategic alliance."
In recent years, there have been a number of commercial disputes between the two countries affecting a range of goods from exports of poultry to the textile industry. Despite the seeming good relationship between Kirchner and Lula, those frictions have worsened in recent months, with Argentine industrialists accusing their Brazilian counterparts of dumping products into the Argentine market at cheap prices in a bid to boost sales amid an economic turndown in Brazil.
Along with Lula's refusal to openly support Argentina's tough negotiating strategy in its recent accord with the International Monetary Fund, these disputes have been interpreted as a sign of weakness in the relationship. Thursday's series of sweeping agreements is seen as a determined effort to overcome those problems.
-By Michael Casey, Dow Jones Newswires; 54-11-4313 1918; michael.j.casey@dowjones.com
(Laurence Norman contributed to this article.)
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