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Lula lauds Brazil's economic outlook

By CARMEN GENTILE, UPI Latin America Correspondent

SAO PAULO, April 30 (UPI) -- Brazil's president declared Friday that South America's largest nation was not meant to remain an "eternally emerging" country, but already held a prominent position in world markets.

His boastful remarks followed Brazil's unprecedented victory over the United States in a World Trade Organization dispute.

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Speaking at an agricultural fair in Sao Paulo, Luiz Inacio Lula da Silva recalled how Brazil had forged a "strategic partnership" with countries like South Africa and India as part of the nation's agenda for economic growth and prosperity that wasn't directly tied to U.S. interests.

Last year, Lula and leaders from the other two nations formed what they called the G-3 trade bloc. Lula hopes to one day add Russia and China to its ranks. The news group's proclaimed agenda is to forge stronger economic ties among developing nations so that they don't have to rely so heavily on the United States as a trading partner.

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"Each millimeter of space must be fought for because there are no gifts in this globalized commercial world," said Lula in an address that sounded more like a rallying cry for Brazil's global trade ambitions.

Lula has made challenging the U.S. economic machine a trademark during his 16 months in office and Friday's rhetoric just added to his mythos as a crusader for developing nations who want to become powerhouses in their own right.

"Brazil has the potential to not owe anything to anyone in terms of competitiveness," he added.

While exports have been on the rise in recent months, Brazil is still staggering as it emerges from several years of recession and a 2003 in which the economy actually shrank by 0.2 percent. The loss posted last year caused Brazil to slip to 15th in world economic rankings and behind the likes of significantly smaller nations like the Netherlands.

But on Friday Lula appeared undaunted by Brazil's poor performance last year.

Perhaps the president was still riding a high from Monday's victory over the United States when the WTO sided with Brazil's complaint that U.S. subsidies for cotton farmers unfairly increase production and lower world cotton prices.

Washington was none too pleased with the ruling and said it would appeal it when the WTO makes its final decision in June.

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Yet Brazil's preliminary victory over the United States marks the first time a developing nation has registered and won a complaint in the WTO against an economic powerhouse.

For Brazilian Agricultural Minister Roberto Rodrigues, Monday's WTO ruling was "absolutely extraordinary."

Brazil cried foul of U.S. cotton subsidies totaling $10 billion over seven years, claiming they violated global trade rules. The United States is legally allowed to provide $1.6 billion in annual subsidies to its cotton farmers.

Coming out on the winning end of the ruling appears to have inspired Lula to seek new territories to conquer, such as strengthening trade ties between South American nations in the Mercosur trade block (Argentina, Brazil, Paraguay and Uruguay) and the European Union to improve its bargaining position in the ongoing Free Trade Area of the Americas talks.

Co-chaired by the United States and Brazil, the proposed 34-nation FTAA would include every nation in the Western Hemisphere -- except Cuba -- and lower trade barriers from the Arctic to the Antarctic.

Brazil is already leading a coalition of disgruntled Latin Americans who complain that the proposed agreement is heavily in favor of U.S. interests and doesn't grant them the same access to U.S. markets that the United States would enjoy in Latin America.

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