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Brazil's China Plan Appears On Track

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by Carmen Gentile
Sao Paulo (UPI) May 25, 2004
Brazil's president is making good on his promise to bolster trade relations with China, a move Washington is surely watching with great interest.

But what is perhaps raising the most eyebrows in the Bush administration is Tuesday's news that Brazilian President Luiz Inacio Lula da Silva may be seeking closer relations with China regarding the production of uranium, the raw material used for nuclear arms.

Lula is in the midst of multi-day tour of China, the business end of which began Sunday when he inaugurated the opening of an office of the Brazilian oil company Petrobras in the Chinese capital.

By Monday, the Brazilian leader was busying himself with the pursuit of several trade agreements. Along with his Chinese counterpart, Hu Jintao, Lula inked several deals, among them a $1 billion contract for China to b uild an aluminum factory in northeastern Brazil.

Others include agreements on oil, steel and car production set for both nations. In all, 15 different agreements were signed.

On Tuesday, Brazil and China discussed the possibility of a wide-ranging agreement regarding the production of uranium.

The agreement could result in Brazil's ability to independently produce low-grade uranium for use in power plants. It must currently send its uranium abroad for further refinement.

Meanwhile, China appears interested in buying uranium from Brazil, which has the world's 6th largest reserve. Brazil said it would be interested participating in the planned construction of 11 nuclear power plants in China.

The flurry of economic activity during the president's visit to China came as no surprise. Lula made clear in the weeks leading up to his trip that he was adamant about securing closer ties between two of the w orld's leading developing nations. His traveling contingent of 400 businessmen and nine ministers in tow is a testament to just how much business Lula is looking to do in the Far East.

China is already Brazil's third-largest trading partner behind the United States and Argentina, with Brazilian-Sino trade reaching $8 billion last year. By next year, Lula said he hopes China can move into the No. 2 position.

Lula told reporters on Tuesday in Shanghai that he is certain that Brazil and China can forge a closer working relationship, the kind many other nations would have difficulty creating because of past conflict.

"I reminded (President Hu Jintao) that in the last few years there have not been any two countries with a better chance of improving ties that China and Brazil," said Lula. "It's for a very simple reason: China does not have any political or economic gripes with Brazil."

Lula's pursuit of c loser ti es to China is part of the Brazilian president's sweeping international agenda for improving Brazil's trade relations with other developing countries and regions, emphasizing the importance of forming these relationships so that the developing world does not have to depend so much on the United States and other leading nations.

Since assuming office in January 2003, the left-wing Lula has been busy cultivating relationships with the world's major emerging markets in Asia, Africa and the Middle East.

Last year he formed - along with India and South Africa - a group dubbed the G-3 that in theory works toward providing member nations with an economic support base that doesn't include the United States and counters what Lula once termed U.S. "hegemony in international relations."

Since then, the Brazilian president has declared his hopes that Russia and China would join the ranks of the G-3, thereby gaining preferentia l access to their markets and making them converts to Brazilian goods.

Despite his public quest for alternative trade partners, Lula acknowledged the importance of Brazil's relationship with the world's economic powerhouses and stressed that improved trade relations with China will not serve to replace existing ones.

"We all know the importance of (trade relations) with the United States and the European Union, but we also all know the limits in doing business with them," he said.

Lula appears to be trying to keep the peace between Brazil and the United States even though his ambitions regarding China are controversial.

Science Minister Eduardo Campos sought to counter international concerns - namely the United States' - about Brazil selling uranium to China. "We uphold our historic position to not sell uranium to countries interested in buying it," said Campos, who added, however, that Brazil would discu ss the p ossibility of selling refined material for industrial use.

Campos' comments are likely to come under the scrutiny of Washington, which already harbors its suspicions of Brazil's nuclear energy plants.

Defense officials and the White House were miffed with Brazil last month when it refused to allow U.N. nuclear inspectors to examine a uranium-enriching facility near Rio de Janeiro.

Brazilian officials insisted the facility - still under construction - would produce only low-enriched uranium used as fuel in power plants and not the highly enriched material used in weapons.

They also say the inspections are unnecessary and intrusive, since Brazil formally abstained from nuclear weapons development in the 1990s.

Brazil has since relented and allowed inspectors to view some sectors of the facility, though kept others hidden to protect technology developed in Brazil.

Was hington is fearful Brazil's action will set a dangerous precedent for other nations such as China. It is also concerned Brazil could develop the material for other nations seeking to create nuclear weapons. Brazil was major supplier of uranium to Iraq from 1979 until 1990.

Bush officials expressed their dismay with statements made by Lula during his presidential run in 2002 when he complained that the 1970 Treaty on the Non-Proliferation of Nuclear Weapons was unfair.

"If someone asks me to disarm and keep a slingshot while he comes at me with a cannon, what good does that do?" asked Lula during a campaign speech.

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