Rousseff Speaks to Protectionism at UN

By Andrew Willis, Contributing Reporter

RIO DE JANEIRO, BRAZIL – Brazilian President Dilma Rousseff used her speech Tuesday (September 25th) at the opening session of this year’s UN General Assembly to rebuff accusations of Brazilian protectionist economic policy. She added that budget cuts and expansionary monetary policies in the U.S. and Europe were hurting emerging nations across the globe.

The first head of state to take to the podium at the meeting in New York, Rousseff said that all trade measures taken by the current Brazilian government were in accordance with rules laid down the World Trade Organization.

“We cannot accept that legitimate trade defense initiatives by developing countries be unfairly classified as protectionism,” Rousseff said.

Earlier this month Brasília announced plans to raise import tariffs on a hundred foreign products in order to help struggling local industries, with the list including steel, rubber tires, chemicals and potatoes.

The move served to heighten already tense trade relations with developed countries, prompting U.S. Trade Representative Ron Kirk last week to urge Rousseff’s government to perform a u-turn.

The import tariffs are likely to feature on the agenda of UK Prime Minister David Cameron and Minister for Trade Lord Green when they touch down in Brazil later this week.

Local content rules in Brazil’s oil sector have also attracted criticism from abroad, while Brazilian politicians have pointed to U.S and EU farm subsidies and agricultural trade barriers as evidence of hypocrisy.

Rousseff used her speech at the UN General Assembly to hit out at expansionary monetary policies in the U.S. and EU, saying they threatened to artificially raise the strength of the Brazilian Real and harm the country’s exports.

She also pointed to budget cuts in Europe as counterproductive, claiming instead, that Brazil’s spending policies were a better model for tackling the global economic crisis.

“We know from our own experience that the sovereign debt of states, as well as the bank and financial debt, will not be dealt with in the framework of a recession. On the contrary, recession only makes these problems more acute,” said Rousseff.

Threatened by rising bond yields and a fall in tax revenues, EU governments have resorted to a series of spending cutbacks in recent years, a strategy that critics say is likely to further slow growth, and drive up unemployment.

“The main leaders still have not found a way” to create a more inclusive economy, said Rousseff on Tuesday.

By way of contrast, the Brazilian president underlined her country’s track record over the past decade, with an estimated forty million Brazilians lifted out of poverty. Brazil’s economy performed well during the height of the global economic crisis, but is now forecast to expand by a meager 1.6 percent his year, well below BRIC peers.

Rousseff also used the UN meeting to criticize the violence in Syria, but declared that a military solution was not a viable option. In line with its growing economic stature in recent years, Brasília has sought to play a larger role on the geopolitical stage.

The last trip to the U.S. by the Brazilian leader was in April 2012, when a bilateral meeting between between Rousseff and U.S. President Barack Obama covered the international economic crisis, the Rio+20 Conference, and a new student exchange program. Last year when President Rousseff opened the UN General Assembly she was the first female in history to open the proceedings.