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The Rt. Hon. Baroness Symons of Vernham DeanAnglo-Brazilian Chamber of Commerce |
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Ambassador, Mr Chairman, distinguished guests, Ladies and Gentlemen, Good Afternoon. I am truly delighted to be able to address the Chamber so soon after the historic events that took place in Brazil recently. On the global stage, Brazil has certainly been a major player during the last few months Firstly, the talented Brazilian national football team won the World Cup with some ease in Japan during the summer. Nothing surprising there you might say. Almost "business as usual" in the football world. However, ten days ago, following a well-conducted, open and democratic election, Brazil voted into power a President from the left side of the political scale. Now, in the Political and Economic world, people are once more sitting up and beginning to take notice. But is it going to be "business as usual" for Brazil – the country - in the coming years? Well, it certainly has been a momentous last few weeks for Brazil. Equally, it has been a triumph for the forces of change and a triumph for Brazilian democracy Firstly, I pay tribute to Brazil's first ever nation-wide electronic election, which allowed you to count so many tens of millions of votes in so few hours. Secondly, it is clear that both the President and President-Elect are determined that the transition will be not merely well ordered, but also a matter of mutual respect. These matters show that, really, Brazil needs no lessons in democracy. It is no coincidence that Tony Blair wanted to congratulate Lula personally by phone when the results came through. We know and understand the challenges facing President elect Lula da Silva. His campaign slogan " I want a decent Brazil" brought back memories of Tony Blair five years ago. Then we, in Britain, had to convince the markets that a government of the left could be trusted to run the economy responsibly. And not to disappoint the millions of voters who had put their trust in us and wanted change. It meant some tough choices and required patience. But by establishing a stable economy we have been able to make the largest investment in public services for fifty years. The same services that Brazilian voters want improved – health, education and law and order. President-elect Lula has also spoken of his passion for jobs. Nothing gives us more pride here than to have more people in work than ever before. We have confidence in Brazil. President-elect Lula inherits many strengths – a robust primary fiscal surplus; a strong banking system and corporate sector with low leverage; and a balance of trade that has gone from a deficit of 689 million US Dollars in 2000 to a likely surplus of 11 billion US Dollars this year. I would love to know the secret of the latter!Five years ago, President Cardoso's visit to Britain acted as a catalyst for a much closer relationship between our two countries. Tony Blair's landmark visit to Brazil last year reaffirmed the close ties both at Ministerial and official level. I am delighted that all the hard work being put in on both sides is now beginning to bear fruit. Out of Brazil's top twenty commercial partners the United Kingdom is one of only two whose exports to that country have risen so far this year – an increase of over 13% on the same period last year. Added to that, our market share, albeit starting from a disappointingly low base, has increased too by 30% to just under 3%. And 8 of our top 10 exports to Brazil are up. I believe that this clearly demonstrates that British companies realise just what an important market Brazil is despite the recent volatility on the financial markets. But this is not the end of the story more like the beginning. I am, along with my Government colleagues, tremendously excited about the prospects of working with the new Brazilian Government to boost bilateral trade, investment and co-operation. I know, from the visits I have made to Brazil and the discussions I have had with senior UK business people, that Business would like to have a Double Taxation Agreement with Brazil. And to see our Investment Protection and Promotion Agreement ratified. I also hope we can look at new ways of working together to develop trade with third countries. Indeed a good example of how that collaboration is already working is the Brazilian Foreign Trade Ministry's own on line export intelligence service – Brazil.Tradenet whaich was based on our own TradeUK service. The British Government is well aware though that to realise its potential as an exporter, Brazil needs greater market access for its agricultural goods. And an end to subsidised agricultural exports by other countries. The Prime Minister made it absolutely clear how much importance Britain attaches to deep reform of the European Union's Common Agricultural Policy when he spoke in Sao Paulo last year. I want to reiterate our commitment to that goal today. A goal that will enable us to achieve the ambitious poverty reduction targets that we are committed to. A goal that will enable us to achieve a successful outcome to the Doha Development Round. And a goal that will enable Brazil to pay its way in the world. This is not about charity. It's about fairness. But I would like to concentrate on this issue a bit later on. I have touched on the present state of our commercial relationship, and on the long-standing ties that bind our two countries, but we also need to look to the future and see just exactly where we can benefit jointly and I would like to offer the following example. It is no secret that we both face challenges in the oil and gas sector. In Britain, we face declining production in the North Sea in the next 20 years. In Brazil, the challenge of achieving self-sufficiency against a background of economic instability and uncertainty, both nationally and world wide, speaks for itself. The British government's trade promotion agency, Trade Partners UK, has identified Brazil as a priority market for several sectors. Among those, none is more important than the energy sector, and our commitment to it is not about to change. I feel certain that the marked increase in British company involvement and investment in the Brazilian energy sector will continue. This has to be good for both sides: the energy sector will clearly play a key role in Brazil's economic growth, and expansion into this new market will enable British companies to thrive as North Sea revenues decline. Brazil has unrivalled expertise in deepwater exploration and production. The UK has a similar strength in sub sea technology. Just imagine what could be achieved by further combining those two strengths. Not just off the coast of Brazil, but in other parts of the world too, like the Gulf of Mexico. Together I believe we could be world beaters. We are already working towards this goal through projects supported by my Export Credits Guarantee Department. The ECGD has just given its backing to a pioneering $41 million structured finance deal with Petrobras, to supply undersea technology to the Marlim Sul oil field. $29 million of this contract will be carried out by a UK workforce in Newcastle-Upon-Tyne, while Brazilian expertise will direct the frontline work on the P40 oil platform. This is an excellent example of how we can combine our strengths in engineering and technology to mutual benefit. Of course, international competition for foreign direct investment is acute and investment will always go where the economic climate is stable and transparent. And, importantly, where the returns are commensurate with those that can be achieved in other markets. Brazil has been very successful in attracting direct inward investment in recent years, reflecting the fact that these conditions have indeed been achieved. It is essential, in my view, that Brazil should remain open to trade and investment flows in both directions. I'd like now to come back to the trade policy agenda. We must continue to strengthen our trade links. Promoting the benefits of reciprocal trade liberalisation. Opening new markets. And reducing trade barriers. Good progress has been made. But it is important that momentum is maintained. Both bi-laterally, through the EU – Mercosul negotiations and multilaterally with the World Trade Organisation negotiations - The "Doha Development Agenda". The EU – Mercosul negotiations could potentially open the way to increased prosperity and opportunity between our regions. Like Brazil, the UK remains strongly committed to an EU Association Agreement with Mercosul. We believe it will assist Mercosul's own economic integration. We must build on the fresh impetus given at the EU-Mercosul foreign ministers' meeting, in Rio de Janeiro, in July. Ensuring that important milestones are met and deadlines achieved during the next eighteen months. Within the WTO it is essential that all members continue to work towards a successful outcome at the Ministerial Conference in Cancun in September 2003. We will all be looking for some concrete results at Cancun. To help keep the work programme approved at Doha on track. Securing the benefits of freer and fairer trade for all members. Developed, emerging and developing countries alike. The figures speak for themselves. Halving protectionist barriers to trade worldwide could boost developing country incomes by $150 bn a year, three times the amount currently given in aid to those very same countries. However, I am also sympathetic to the fact there will be some tough decisions - and late night negotiations ahead. Governments must be prepared to work hard. To take those tough decisions. And to ensure that the promises made at Doha are kept. Europe will not be an exception. Europe can't just keep coming out with the rhetoric on free markets if it's not prepared to deliver where it really counts. We must reform the common agricultural policy as part of the Doha negotiations. The Prime Minister reiterated that to EU heads at the Brussels European Council last month. If we are to honour the commitments we gave at Doha we cannot continue with a system of subsidies that gives $2 a day to every cow in Europe … but leaves one thousand, two hundred men, women and children around the world living on half that amount. This is also important to the Brazilian economy. Further agricultural liberalisation could increase your agricultural exports by 10 billion dollars within a few years. Transforming the Brazilian economy. Reducing unemployment as well as rural and urban poverty. It would also stimulate greater competition; provide increased choice; and lead to improved value for money for consumers. Surely a prize worth fighting for!? Elsewhere, we see huge potential benefit in the liberalisation of trade in services. In the UK, for example, the liberalisation of telecommunications has led to increased competition. Giving consumers greater choice and lower prices. All countries – developed and developing – stand to benefit from improvements in their services sector. In some cases these improvements will come from liberalisation – doing away with barriers that hinder growth and trade. We want to provide the opportunity for developing countries to benefit from these discussions so that the trade rules that result are fair as well as free. Of interest to the business community here today, we are hopeful that new negotiations aimed at securing a WTO agreement on competition and investment rules will be launched at Cancun. The benefits that a multilateral framework of competition rules could provide are clear. Improving global governance in competition matters. Providing a framework that would facilitate worldwide co-operation to fight the growing prevalence of international anti-competitive practices. In particular, hard-core cartels - the worst form of anti-trust violation. From our discussions with developing countries, it is clear that many see the benefits of a multi-lateral framework for investment. Greater predictability and certainty for investors, increased coherence on international investment rules and under-pinning ongoing investment reform efforts. This can only help bring about greater investor confidence - essential to generate the higher investment flows many developing countries want and desperately need. We believe that WTO agreements covering investment and competition, will help developing countries meet their development objectives by improving overall economic welfare and helping them to realise the full benefits of trade liberalisation. Brazil stands in its own right as a market worthy of our special attention. It's as large in territory, population and GDP as the rest of South America put together. Brazil is not always given credit for being a free trader. How many people here know (besides the Ambassador, of course!) that Brazil is currently negotiating twelve bilateral or multilateral agreements? I particularly welcome Brazil's efforts to strengthen Mercosul and to reach an agreement with the Andean Pact. I sincerely hope that it will be possible for senior British representatives to visit Brasilia early in the New Year to compare notes with the new government. All this leads me to conclude that there is a strong base from which to build. And listening to President elect Lula talk of those areas of the economy that need reform – taxes, employment law, social security – it is clear how much scope we have for sharing experience. Indeed, I believe this agenda is made for a government of the left with its roots in the labour movement. Britain is a true and reliable friend. Some of our companies have been in Brazil since the 19th Century and we have new investors (like JCB and Moy Park) arriving. We supported Brazil's agreement with the IMF. And we look forward to working with President elect Lula both on the great, international issues and on our shared agenda at home of fighting poverty, creating jobs and providing quality public services. Ambassador, Mr Chairman, thank you very much again for giving me the opportunity to address the Chamber at such an exciting time for Brazil. It is certainly a time to look forward with confidence. And I sincerely hope that both Britain and Brazil can share that same, bright future in close partnership. Thank you. |
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Other speeches by The Rt. Hon. Baroness Symons of Vernham Dean
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