Brazil and Mexico Discuss Bilateral Relations During Seminar at The LIDE's 17th International Meeting

USA - English

• Brazil - Português
• Latin America - español

SAO PAULO, Oct. 15, 2012 /PRNewswire/ -- At the opening of the International Seminar, held on October 12 as part of the 17th International Meeting organized by LIDE – Grupo de Lideres Empresariais [Group of Business Leaders], Marcos Raposo, the Brazilian ambassador to Mexico, emphasized that, with the two countries currently experiencing ample growth, cooperation should overpower competition. "Brazil needs to participate more in the consumer market, and Mexico needs to diversify its business relations." The meeting brought together 110 Brazilian and Mexican businessmen and government leaders from October 11 – 13 in Punta Mita, Mexico, to discuss "The challenges of the Latin American economy."

Opening the talks was economist and president of the LIDE ECONOMIA [ECONOMY], Paulo Rabello de Castro, who headed the debate "Brazil in Latin American and Latin America in the world" among the business leaders in attendance. He argued that a union between Brazil and Mexico would generate a much greater GDP. "We have a green light to invest in and expand business." He continued, "Through initiatives with Argentina and other countries lead by the Mercosul, Brazil has the right conditions to be a contributing force in Mexico, which in turn offers its extensive experience with Central America."

Brazil falls short in terms of economic activity and business development. In the last 20 years, the country has faced a nearly unending series of economic difficulties. "We were swept along by terrible winds during this period, winds encompassing foreign debt. Thankfully, that is now a thing of the past."

According to the economist, hyperinflation takes a long-term toll on any country. "We need to fight to change this outlook," he warns. "Brazil is a country that practices a residual-based approach to monetary correction, with residual public funds that need to be fiercely reviewed during the process of modernization," Rabello de Castro further explains.

Brazil is seeking to join forces with other Latin American countries. As a result, it is facing challenges in the areas of innovation, investment and infrastructure, the latter being crucial in terms of the ability to integrate transport, which facilitates exports and imports in both Brazil and Mexico. "Our country will have to learn to manage abundance and not scarcity," Rabello explains. "We invest little when bureaucracy consumes money that should have been earmarked for investment."

For Paulo Rabello de Castro, one must politically embrace socialism. "Taking this position does not mean arguing for the confiscation of private capital; it means apportioning government capital…. We need to abandon statism and espouse socialism," he concludes.

Economic challenges

The second panel of the day, "The challenges of the Latin American economy" was chaired by Paulo Skaf, president of FIESP - Federacao das Industrias do Estado de Sao Paulo [Federation of Industries of the State of Sao Paulo], who explored results in both countries' automotive sector. In the last five years, the number of vehicles coming from Mexico increased 260%, while Brazil's exports in the sector decreased 50%, leading to a commercial imbalance in both countries.

According to Skaf, the situation poses a threat the parts automotive-industry sections of the ACE 55 - Acordo de Complementacao Economica [Economic Complementary Agreement], signed in 2002 by both Mexico and Mercosul, with Brazil accepting the agreement internally as well. "But after new conversations, there was a new agreement to establish a free-market relationship," Skaf explains.

Brazil is very interested in expanding business with Mexico, which is currently in a deficit. "In September, during a visit from President Enrique Pena Nieto, we had the opportunity to express our desire to strengthen our countries' relations, thus ensuring a future of promising agreements for different sectors of production," the president of the FIESP recalled.

Paulo Skaf lightly chided the businessmen, insisting that the sector needs to support all agreements signed between the two governments. "Whenever there is an agreement like this – the ACE 55, the business sectors show resistance. This outlook must and will change from here on in order to truly expand."

The president of the FIESP expressed optimism with respect to the growth of business between the two countries. He says that when there is a political will, when the different sector of production are amenable and when there is interaction between the countries, business is in a position to grow and benefit everybody. "We have a study in which we consulted the main sectors of production in terms of their willingness to sign an agreement with México. The findings show that, with the exception of the electronics sector, all sectors of production are open to negotiations and agreements with Mexico," he explained.

The Mexican economy is expected to grow 4% this year, and Brazil's 1.4%. Comparatively, the US is expecting 2.2% growth, and China 7.8%. Only the Euro will face negative growth in the coming year. "For Brazil, the main thing weighing down on GDP is poor industrial development, which has been heavily impacted by the crisis in Europe and the decrease in consumption in Brazil," Skaf explains. "Joining forces with Mexico will certainly help us bolster these numbers; it is important for us that these numbers remain positive," he concludes.

Press contact:
Erica Valerio – CDN Comunicacao Corporativa
Phone: 55 11 3643-2710

SOURCE LIDE - Grupo de Lideres Empresariais