Brazilian vice-president defends trade expansion between Brazil and Latin America

Brazil’s Vice President, Geraldo Alckmin, yesterday defended the expansion of trade between his country and the rest of Latin America, recalling that currently, only 26 percent of transactions are interregional.

“In the world, although globalized, trade is tremendously intraregional,” said Alckmin, who these days are Brazil’s acting president while Lula da Silva is on a trip to China, during an event of the Brazilian Association of Infrastructure and Basic Industries, in Brasilia.

Alckmin gave examples that trade between Asian countries reaches 70 percent, in the European Union 60 percent, and between the United States, Canada, and Mexico, it is 50 percent.

“We have to start with our neighbors, to make a great commercial effort in the region, where we sell trucks, cars, buses, auto parts, white goods, value-added products,” he explained.

That is why, according to him, President Luiz Inácio Lula da Silva began his international participation in this third term by traveling to Argentina and Uruguay.

Then he was in the United States, the largest investor in Brazil, and now he is in China, the country’s largest trading partner, with the expectation that more than 20 agreements will be signed with the Asian country.

Alckmin also commented that the Brazilian Government is optimistic about approving the fiscal framework and, subsequently, the tax reform to leverage investments in the country.

For the Vice-President, who is also the Minister of Development, Industry, Trade, and Services, Brazil had early and worrying deindustrialization, but with the announced measures, it can recover competitiveness.

With the package of fiscal measures, which still has to be sent to Congress, the Government seeks to ensure credibility and predictability for the economy and the financing of public services such as health, education, and public safety.

“The new fiscal framework we are proposing is intelligent because it establishes rigor in public spending, the debt curve will fall, and on the other hand, it is countercyclical, that is, when the economy grows very strongly, you have a spending ceiling, and when it is weaker you have a floor to help boost economic activity,” he explained.

Also, according to Alckmin, the role of credit is vital in this scenario. It should be boosted by the reduction in interest rates due to the improvement in expectations with the country’s fiscal policy.