Brazilian President Courts Costa Rica

June 5, 2009

Brazilian President Luiz Lula da Silva landed in Costa Rica earlier this week in hopes of forging greater economic alliances with the small Central American country.

It’s the first time that any Brazilian president has visited Costa Rica in recent memory – at least “since the emperor,” Lula da Silva joked at a press conference with President Oscar Arias on Wednesday.

He said that “in this global world we have to come together” economically, a goal that inspired his tour beginning in El Salvador on Monday, traveling to Guatemala on Tuesday and ending in Costa Rica on Wednesday.

“These visits mark the vast potential of opportunities that will open with our relationship, in a wide range of sectors, including trade, investment and technical cooperation,” said Lula da Silva.

Hoping to be at the forefront of trade negotiations with Central America, Arias promoted Costa Rica as a bridge to commercial relations with the other small countries that line the isthmus.

“Of the countries in Central America, Costa Rica offers major advantages,” said Arias, making his pitch. “We have one of the oldest democracies in the region, we are politically stable and (we provide) a law that gives investors security…We are a country that is attractive for Brazilian investment.”

During the next six months, the two countries will work with the Central American Integration System (SICA) and the Southern Cone Common Market (MERCOSUR) to facilitate increased trade.

For every dollar exported to Brazil, Central America imports $24, Arias said. And for every dollar that Costa Rica exports to Brazil, $11 is imported from the South American country.

The reason for the imbalance, Arias said, is that the average tariff in Central America is much lower than the tariff in Brazil, a factor that needs to be considered as trade negotiations proceed.

Lula da Silva expressed interest in an economic exchange with Costa Rica that resembles the outsourcing system established in developing countries by United States corporations.

“One way to balance trade between large countries and smaller ones is for a nation like Brazil to come to Costa Rica to produce and re-export (those products) to Brazil,” Lula said.” That is what we are doing with Venezuela and what we (should) do with Costa Rica.”

–Chrissie Long

 

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