Foreign Correspondence

[Amaunet]

With Washington focused on Iraq and its war on terror, and Americas-wide trade talks at an impasse, Beijing hopes to grab favorable trade terms and niches left open by United States.

"In China's case it can steal a market from the United States," said economist Alexandre Freitas Barbosa at the Prospectiva Consultancy in Sao Paulo.

Washington has effectively turned the focus of the American public on Iraq yet the real battle is being waged and won by China. Throughout the world countries who cannot afford not to enhance their relationship with China are turning to the dragon as their new leader.

Bush will go down in history as the president whose notorious lack of scope lost America’s dominance.

"We can't afford not to enhance our relationship with China at this point in our history,"

The Howard Government has given its most upbeat assessment yet on a free trade agreement with China, claiming it would be "arguably more important" than Australia's bilateral pact with the US.
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-Am

Brazil Recognizes China as a 'Market Economy'
Fri Nov 12, 2004 05:06 PM ET

By Andrew Hay
BRASILIA, Brazil (Reuters) - Brazil has met Chinese wishes to recognize the Asian country as a "market economy" in a move to solder the two emerging giants' growing commercial ties, the nations' leaders said on Friday.

The recognition by Brazil of China as a market economy came during a visit by Chinese President Hu Jintao and could boost the Latin American country's bid to get more of its farm exports into the world's fastest-growing major economy.

"This position of Brazil will certainly make the conditions of the strategic relationship even richer and will favor economic and trade cooperation," Hu said in a speech in Brasilia.

By granting market economy status to China, Brazil waives rights to raise anti-dumping barriers on Chinese goods and gives an example to other developing countries that Beijing hopes they would follow.

Brazil needs access to the world's most populous nation to fuel exports that will account for about half of Brazil's 2004 economic growth.

But some observers said the country had given away an important bargaining tool in its rush to ship more commodities to China. Around 20 nations, including many Asian countries, have given China the status but Brazil is the biggest.

"China gained much more than Brazil, they paid a very low price for what they got," said Jose Augusto de Castro, director of the Brazilian Foreign Trade Association.

China failed to strike a deal with Brazil on soy, the Latin American country's biggest single export there. Brazil had hoped to prevent another row after China blacklisted many of its soy shippers earlier this year, saying their loads were tainted by fungicide.

It cost Brazil an estimated $1 billion in lost soy trade.

China entered the World Trade Organization in 2001 as a "non-market economy" and faces anti-dumping barriers to exports until it gains "market economy" status.

With its voracious appetite for food and raw materials, China is keen to make Brazil its Latin American grains basket, a leading supplier of minerals like iron ore and invest in Brazil's ports and railways to get goods to its shores.

Trade Minister Luiz Fernando Furlan said Chinese investment in the next two years could reach more than $10 billion.

Brazilian President Luiz Inacio Lula da Silva signed a string of agreements with his Chinese counterpart, among them deals to boost Chinese pork exports to Brazil and Brazilian exports of chicken and beef to China.

Brazilian Agriculture Minister Roberto Rodrigues said the deals would amount to $800 million in exports in a few years.

"As of the moment Brazil guaranteed to recognize China as a market economy we noted a friendlier approach by the Chinese government on trade," he said.

China is poised to become Brazil's second-largest trade partner in 2004 after the United States. Beijing expects trade to increase fivefold by 2010 to $35 billion. Brazil, meanwhile, provides only around one percent of China's imports.

With Washington focused on Iraq and its war on terror, and Americas-wide trade talks at an impasse, Beijing hopes to grab favorable trade terms and niches left open by United States.

"In China's case it can steal a market from the United States," said economist Alexandre Freitas Barbosa at the Prospectiva Consultancy in Sao Paulo.


http://www.reuters.com/newsArticle.jhtml?type=worldNews&storyID=6803059