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Correoi Sindical
Mercosul Number 02 - February, 15
to February, 28 2002 Argentine Crisis Argentine government
averts potentially devastating oil strike The order for "compulsory arbitration" makes it illegal for the workers to strike for a 15-day period. It was imposed after trade unions and oil company representatives failed to reach agreement at a meeting called by the labor ministry. Labor Minister Alfredo Atanasof said both sides accepted the decision. Trade unions had initially called for an indefinite strike starting Monday evening, to protest what they said were likely job cuts that would affect 10,000 oil workers. They said the strike would lead to severe fuel shortages, predicting that gas stations would run out of fuel within a week, paralyzing much of the already crisis-struck country. Oil producers also have been pressing the government to scrap the tax that is to be imposed from March. "If the 20 percent tax on exports is applied, this is equivalent to a drop in price of four dollars per barrel, and in the past it has been evident that when crude prices fall ... the level of investments fall, there is less activity, and as a result, there are lay-offs," said Shell-Argentina vice president Juan Jose Aranguren. Oil companies also warned that a 50-percent devaluation of the peso that followed the elimination of parity with the dollar last month, would force them to hike fuel prices by as much as 25 percent, a move that would further aggravate Argentina's severe economic crisis. But President Eduardo Duhalde said he would not allow such price hikes. "For a long time the various oil companies had major earnings, and it is time to understand the Argentine situation," he said. (AFP, February 19, 2002) March in C�rdaba against
firings The demonstration was headed by local leadership of SMATA. Prior to the march, workers stopped all activities - in the factories that were not under mandatory recess- and organized a meeting at union headquarters. A union leadership
delegation was received by the acting governor, Herman Olivero, and
general secretary of governance, Olga Riutort de la Sota. Riutort promised the delegates steps to stop the dismissals and at the same time measures to allow auto makers to receive from the federal government back payments on exports and exchange plans (planes canje). Renault indicated that payment of the $240 million it is owed would alleviate its current situation, insinuating that with these funds it could avoid drastic decisions. Meanwhile, Volkswagen sources stated that workers at the C�rdoba plant were willing to continue working, but they had to comply with the strike. Most of the auto plants in this region- Renault, Fiat, and Iveco- slowed down production to a crawl or stopped production, while VW's the gear box factory continues to export to markets in Latin America and Europe as usual. (La Nacion, February 21, 2002)(our traduction) Unions appalled as
Duhalde warns Argentina can't pay public sector wages "It would appear that we can't pay state salaries. There's no money. The situation is very serious," Duhalde said in a radio interview. Due to the crisis, the government would only give state workers their wages after it had paid retirees and people who receive benefits, Duhalde told La Red radio network. Earlier in the day, Economy Minister Jorge Remes Lenikov warned of the consequences if the international money lenders continue to withhold loans from the crisis-hit nation. "If Argentina does not re-engage in the world and cannot access foreign funds, its overcoming of this crisis is likely to be traumatic," Remes Lenikov said on Radio America. Major trade union the CGT said there would be "an explosion" if wages weren't paid while the veteran Association of State Workers (ATE) warned of a major reaction from public sector workers. "If they don't pay the wages there's going to be a big explosion. They have to guarantee salaries throughout the country," CGT leader Rodolfo Daer said. "The crisis was not generated by the state workers but by (privileged) banks and economic groups," which in the last 12 years have "accumulated copious profits" and the flight of more than 100 billion dollars in capital. The ATE, founded in 1912, said state workers would "defend their legitimate rights up to the final consequences and they think the president's declarations are a provocation that will contribute to the generating of chaos," ATE said.(...) (AFP, February 23, 2002) More protests in
Argentina, as president warns of more austerity to come Several hundreds demonstrators gathered Friday in the capital's main square, the Plaza del Mayo, the latest of a series of protests by pot-banging middle class Argentines, angry after four years of recession and a banking freeze that has shut off access to their savings. It was however the smallest protest so far, lasting just a couple of hours and taking place without incidents.Other demonstrations took place in the Avellaneda suburb of Buenos Aires, where jobless Argentines blocked one of the main roads into the capital, and in the city center in front of several foreign banks. On Friday, Duhalde warned that state workers might see their salaries cut in the weeks ahead. Last year, state workers' wages were cut by 13 percent. "It would seem that we aren't able to pay in full state workers salaries. There's no money, so we can't pay," the president said over local radio. Yet that optimism was not shared by Rodolfo Daer, head of Argentina's largest union confederation, the CGT, who warned that any failure to pay state workers would provoke an angry reaction. "If they don't pay people's salaries, there's going to be a social explosion, it's unthinkable," he said at a press conference. Others took aim at Duhalde over news that he had ordered his salary to be raised to 3,000 pesos (dlrs 1,500) a month free of tax, a 15 percent increase. The salary had been cut to 2,550 in December by interim President Adolfo Rodriguez Saa. Meanwhile the latest figures on industrial production confirmed the depth of Argentina's economic crisis.(By LAURENCE NORMAN) (AP, February 24, 2002) Unemployed Argentinians
on the march Police used water cannons to disperse the demonstrators, after they started throwing stones and plastic bottles at the dozens of riot police in front of the government house. At least six people were seen being dragged away by police, after a couple of dozen vandals started smashing bank's windows and tried to break into a municipal building. The incidents were over in less than 30 minutes. The violence came after an evening of peaceful protest by about 2500 people mainly middle-class families and members of left-wing political groups. The protestors converged on the Plaza de Mayo, where they spent several hours singing anti-government slogans and banging pots and pans to register discontent with President Eduardo Duhalde's government. Wednesday's demonstrations come exactly two months since former President Fernando De la Rua announced his resignation after two days of looting and violent demonstrations that left 26 dead. Earlier on Wednesday, the unemployed blocked roads across the country and more than 100 angry Argentinian depositors held a noisy demonstration in front of Buenos Aires banks to protest a banking freeze that has shut off access to their savings. The jobless burned tyres and closed off roads in the provinces of Salta, Tucuman, Neuquen, and Chaco. Meanwhile, in the northern province of Jujuy, state workers marched on the provincial government house, shouting for food and back pay. After falling into economic and political chaos last December, Argentina has been engulfed by protests, many led by middle-class Argentinians. Popular anger still runs high over the freeze that blocked the savings of millions of people. (Sapa-AP) (Business Day, February 22, 2002 ) Protesters damage banks
in Argentina The protesters demanded the return of their deposits in dollars on Monday, and not in pesos, as the government of President Eduardo Duhalde has decided. The peso has lost almost half its value since the government decided its flotation two weeks ago. Holding pots, pans and hammers, the depositors entered into the branches of several banks. Some demonstrators broke windows at the entrance of the Banco Frances, while shouting, "Thieves, give us back our savings!" Almost simultaneously, demonstrators entered Banco Rio, broke some windows and then destroyed furniture. Later on, the protesters punctured the tires of two armored bank trucks and broke their windows. (AP, February 20, 2002)
Jobless Argentines stage
mass rally, promise to kick out the government Thousands of people, most of them unemployed, thronged the square fronting the palace to demand jobs and food and to vent their anger at the government's inability to end almost four years of crippling recession. They shouted their anger at President Eduardo Duhalde, saying he would suffer the same fate as the two presidents who resigned in December at the height of violent protests. The crowd was largely made up of "piqueteros" -- Spanish for "picketers" -- the name given to jobless Argentines who man roadblocks to press their demands for food and jobs. "We have nothing, no money, no food. This is the only voice we have," said Omar Rios, 41, an unemployed shoemaker from the La Matanza, a city just west of the capital, that is among the worst hit by the 22 percent unemployment rate. He came to protest, but also to make a few pesos, selling soft drinks to the crowd gathered under bright sunshine. "That's how I survive, hawking food, drinks, whatever I can," said Rios, a father of two. Anything he does not absolutely need and cannot sell, he will take to one of the numerous barter markets that have emerged in recent years. Many of those attending the rally, dubbed the National Assembly of Piqueteros, had spent the night in the open outside Congress after participating in an overnight protest march. (AFP, February 17, 2002) Mercosur Unions Brasil : Union Offices
raided While the WSF was in progress, the CUT's main offices in S�o Paulo were raided by an unidentified group of men with machine guns, dressed in fatigues. All their computers and files were stolen. Many unions from other countries (including the U.S.) have called for international solidarity to aid the CUT. If their party, the PT, were to win power in Brazil, it would make a huge difference for the whole hemisphere-including the fight against the Free Trade Area of the Americas (FTAA). We have returned from Porto Alegre declaring "another world is possible!" Let's organize to make that happen! To ask that the Brazilian government investigate and halt the assassination of CUT and PT leaders, write to Fernando Henrique Cardoso, President of Brazil, , fax 011 55 61 411 2222, and Colin Powell, , fax 202/647-2283. (Labor Notes, march 2002) Changes in the CLT
divides unions Among the unions, the CUT is against the reform, arguing that it will change the logic of the negotiations, with a focus on maintaining rights, and not making real improvements in wages. According to Unicamp economist and Municipal Secretary of Labor of S�o Paulo, Marcio Pochmann, the change will create an Asian-like pattern of employment. On behalf the reform are For�a Sindical and SDS. Their leadership argues that the changes will increase the union's bargaining power, stimulate formal employment and transfer negotiations to employers and employees. Presently negotiations are only possible through the Labor Justice. The CUT's president, Jo�o Felicio, will put forward a denouncement before the Federal Public Ministry against the government's campaign in support of the legal reforms. Fel�cio believes that the campaign is a waste of resources and it serves to influence senators that will have to vote on the initiative. (O Globo, February 22, 2002 e Gazeta Mercantil, February 21, 2002) (our traduction) Unions want to increase
the number of beneficiaries Uruguay : the referendum
campaign continues Concern over possible
closing of rubber factory Mario Vidal, the general secretary of the Union de Workers, Employees, and Supervisors of Funsa, told LA REPUBLICA that in the last few days a consultant of Titan from the United States came to the plant. During this visit the general manager of Funsa-Titan was dismissed and the Distribution Center was closed. The U.S. consultant also confirmed the irregularities denounced by the union, where it is likely that " something like one million dollars are missing". The union leader noted that it has been three months since they have made cubiertas Funsa for the plaza which is completely empty. "Most of the raw materials was sent to the United States and only enough raw material was left to finish the jobs in progress, although we were told that raw materials would arrive at the factory the first week of April. In addition, we were informed that Titan's molds used to make cubiertas were taken out of the factory and sent to the U.S. on a transitory basis." On Friday the union communicated with the firm's consultant Russell Asch via fax asking for written clarification in regards to the personnel leave that begins on Monday March 4 and the reopening of the factory on Monday April 1. Also, a written agreement was requested stating that the molds taken from the factory will be brought back at the end of April of this year in order to continue tire production, as it was promised. (La Republica, February 24, 2002) (our traduction) Paraguay: Worker unions
call for General Strike After a long period of time, the workers' centers could meet in the Congress Hall of the CPT with 500 people. Recently, unionized workers were hesitant to attend union meetings due to the involvement of important union leaders in the vaciamiento of the BNT. In the meeting, the general secretaries of all the unions and their respective delegates participated. The Congress was presided over by Pedro Gimenez, the head of the CUT. The unionists decided to reject imminent public services rate hikes since the costs would be passed on by the government to the people whose salaries are still frozen. Among other measures agreed upon was a request of a 20% salary adjustment for public and private employees and a decision to carry out a demonstration on March 8th in Asuncion. More details of the activity will be provided later. (ABC Color, February 25, 2002) (our traduction) Mercosur Mercosur issues support
plea for Argentina The six members of the world's number three trading bloc asked in a joint statement for "the multilateral credit organisations to understand the complex situation in Argentina and appreciate that the support [Argentina] is asking for is connected to internal policies that will allow for economic growth." Officials from Brazil, Argentina, Paraguay and Uruguay were in Buenos Aires for a summit to discuss the trade bloc's future, amid deep economic problems affecting several member countries. Associate members Chile and Bolivia also signed the statement. Last week Jorge Remes Lenicov, Argentina's economy minister, was in Washington for talks with officials from the US Treasury and the International Monetary Fund to try to secure support for a multi-billion dollar aid deal needed to stabilise the economy after last month's currency devaluation. The European Commission is studying a proposal from Argentina to increase import quotas for a wide range of farm goods to help its crisis-hit economy, EU officials said on Monday. "We're looking into it. It's too early to say anything more," one official said. He said Argentina's requests included using much of last year's quota for beef exports to the European Union, which it was unable to benefit from because of foot-and-mouth disease. The EU in mid-January relaxed the ban on beef imports from Argentina imposed over foot-and- mouth. Argentina shipped $291m (�203m) of beef to the EU in 2000 out of a total of $600m in meat exports. Other Argentine requests centred on using the EU's GSP (generalised system of preferences) regime, under which farm goods are imported into the European Union at favourable tariffs. (Reuters)(Financial Times , February 19,2002) Mercosur postpones auto
sector agreement The current regime establishes that exchanges between Argentina and Brazil must be equally divided, allowing an excess margin of 15% (flex). Argentina, whose internal market is at a standstill, intends to export three units for each one imported. Brazil has agreed to this but is asking to lower the 30% minimum local content requirement for Mercosur vehicles. This would adversely affect the Argentinean autoparts industry. Brazilian Minister of Development, Sergio Amaral, had favored dismissing fines imposed on Brazilian automakers because last year they purchased from Argentinian 37% more than they imported. The Argentinian and Brazilian private sectors and governments agree that PAM was a failure. The changes made to PAM including the flex expansion, will be discussed by business sector representatives at the Mercosur member countries' forum held during the first half of the year. Argentina and Brazil promote groups of representatives from the private sector. Uruguay has its reservations because its fears that the governments, instead of encouraging coordination in specialization and complementarity, they intend to control investment. (La Nacion, February 20, 2002) (our traduction) Argentine bank crisis
spreads out to Uruguay Uruguay's central bank said it would take control of the bank for 90 days after nervous depositors had withdrawn a third of the subsidiary's deposits since December. Argentina's central bank said it would use "all the actions at its disposal" to protect Galicia's Argentine operations, insisting that the two banks were independent of each other. Given the troubled history of Argentina's banks, many Argentines choose nearby Montevideo to deposit their savings. Argentines have billions of dollars in undeclared cash sitting in the banking haven, giving it a reputation as the Switzerland of South America. Analysts say that Wednesday's action by the Uruguayan central bank portends serious problems in the local financial system, as nervous Argentines send their money to more remote offshore havens. Another large bank in Uruguay, Banco Comercial, has also been shaken by fraud allegations against one of its principal shareholders, Carlos Rohm, an Argentine banker. As Argentina's banking crisis deepened on Wednesday the economy minister, Jorge Remes Lenicov, was in Washington, negotiating fresh aid from the International Monetary Fund. The IMF said talks had been "quite positive" but said it was premature to talk about the size of any possible assistance to Argentina. Argentina desperately needs funds to prop up its failing banking system, which is suffering from a collapse in confidence and the government's default on $141bn in public debt last month. Eduardo Duhalde's government has yet to say how it will repay multi-billion-dollar loans from the country's banks. Analysts said they expected Argentina's central bank to have to intervene in Banco Galicia's local operations as well as in several precarious state-owned banks. The bank has lost nearly $3bn in deposits since last June.(...)(By Thomas Cat�n) (Financial Times, February 14, 2002) Brasil : Human rights
commission says police acted brutally in eviction "Police did not attempt to negotiate that people leave and ignored rules about having a judiciary representative witness" the eviction, said Araceli Lemos, a Workers Party lawmaker who belongs to the Para state legislature human rights commission. She added that the police operation was "violent and deplorable" and bullet shells were found at the site of the eviction, proving officers fired at the settlers. But Para Public Security chief, Paulo Sette, said that, "Police acted correctly: they withdrew to avoid a clash. Officers had the courage to step back to avoid a massacre." Sette blamed the violence on settlers, who belong to the Homeless Workers Movement, who he said were well armed. One of the homeless people, Afonso Davi dos Santos, denied that settlers shot at police. In remarks published Friday in Folha de Sao Paulo daily, Dos Santos said police arrived at the lot and immediately began firing shots and ordering people to leave their shacks. Fifty-four police officers, 15 settlers and a local television cameraman were hurt in the violence. Four of the police officers were in grave condition. Dos Santos said that about 2,000 people "who have nowhere to live," settled on the lot eight months ago. He said that they would not leave, "unless we all die." Through the years, there has been much violence in Para, in the Amazon, connected to the landless farm worker movement. More than 1,000 people have been killed in clashes between landless farm workers and the authorities since 1985.(DPA, February 17, 2002) Former head of Brazilian
Congress arrested Barbalho was picked up in Belem, capital of Para state, by order of a federal judge from the state of Tocantins who is investigating the senator's involvement in a multimillion-dollar embezzlement scandal, Bandeirantes television reported. According to that investigation, the former congressional leader headed a network that diverted funds from Sudam, an entity directing development efforts in Amazonia, which the federal government closed down last year after determining it was totally corrupt. Based on the latest polls, the 56-year-old Barbalho, a leader of the ruling Party of the Brazilian Democratic Movement (PMDB) and former governor of the state of Para, is confident he will regain his Senate seat in next October's general elections. One of the judges investigating corruption in Sudam ordered the arrest of 27 individuals last year. Most of them were officials with the organization or heads of companies doing business with it. Barbalho was not arrested at that time because he enjoyed legislative immunity, which he lost in October when he resigned. His resignation came as the congressional ethics committee was about to strip him of legislative immunity as a prelude to impeachment on corruption charges. This would have meant that Barbalho could not run for office for seven years, but resigning allows him to be a candidate in the upcoming elections, either for senator or governor of Para.(EFE, February 17, 2002) As rains resume, Brazil
ends energy rationing "It's highly unlikely we'll have problems in the next two years," said Pedro Parente, head of a government task force to deal with the energy crisis. Federal electricity operator ONS said reservoirs that drive hydroelectric dams had risen to 56.4 percent of capacity in the industrialized Southeast and Midwest, enough to guarantee supply. In the arid Northeast, reservoirs were 47.8 percent full. Brazil relies on hydroelectric power for 92 percent of its energy. In June, a prolonged drought forced the government to impose rationing to avoid California-style blackouts. Homes and industries were ordered to cut energy consumption by 20 percent or face surcharges or temporary cutoffs, while those that saved more were rewarded with bonuses. (AP, february 19, 2002) Dengue cases double in
Brazil Of these, 570 people have contracted the most dangerous form of the mosquito-borne virus, hemorrhagic dengue, and 14 victims have died. Between February 6-17, some 800 new cases were being registered daily. But in the past five days that figure has risen to above 1,600 a day. And the situation has deteriorated rapidly in recent days, with specialists worried the number of people infected by the virus could be three to four times higher than official numbers show. In neighboring Sao Paulo state, 1,120 cases have been registered, of which 276 were in the state capital. Two people have died. Dengue and dengue hemorrhagic fever are caused by one of four closely related virus stereotypes. Dengue is primarily a disease of the tropics, and the viruses that cause it are maintained in a cycle that involves humans and Aedes aegypti, a domestic, day-biting mosquito that prefers to feed on humans.(AFP, february 22, 2002) Paraguay's interior minister resigns after kidnapping of two leftist politicians Paraguay's Interior Minister Julio Fanego resigned Tuesday amid allegations he was aware of the kidnapping of two leftist politicians who were reunited with their families after 13 days of torture. "I had no knowledge" of their whereabouts, Fanego said as he left the president's office, where he tendered his resignation. The government also is to close the intelligence arm of the presidency, which is also under scrutiny in the kidnapping scandal, Chief of Staff Jaime Bestard said. U.S. ambassador to Paraguay David Greenlee asked for an investigation of the case, as well as the 63-day kidnapping of the wife of a Paraguayan businessman. "I say that there must be an investigation to get to the bottom of this because it is fundamentally important for (Paraguay's) institutions," Greenlee told the ABC newspaper. Kidnap victims Juan Arrom and Anuncio Marti were leaders of the Marxist Free Fatherland Movement, which opposes neo-liberal economic reforms. Arrom and Marti are among 11 people accused by police of extortion in the kidnapping of Maria Edith Bordon, also the daughter-in-law of former finance minister Enzo Debernardi. Bestard asked Monday for the resignation of Labor and Justice Minister Silvio Ferreira who, along with Fanego, was questioned about the whereabouts of the kidnapped politicians.(AFP, February 06, 2002) Paraguayan ex-pres.
returned due to homesickness, brother says "My brother returned, first, because he was homesick, his wife and daughters are here and this is his country; secondly, because he decided to submit to justice," said former Interior Minister Carlos Cubas in remarks appearing Saturday in the Asuncion daily La Nacion. The former president appeared unexpectedly Friday at the Palace of Justice and was immediately confined at an army base on the order of Judge Jorge Bogarin, who is supervising the investigation of a March 1999 massacre of anti-government demonstrators in Asuncion. On March 26, 1999, unidentified snipers opened fire on demonstrators protesting against the Cubas government, killing seven and wounding more than 90. The former president was later indicted in connection with the shootings. Carlos Cubas, who is also charged in the case, said his brother turned himself in because he is innocent and expects to be exonerated. (...)Raul Cubas resigned the presidency in the face of widespread protests following the murder of Vice President Luis Maria Arga�a on March 23, 1999, and the subsequent killings of the demonstrators. He immediately sought and obtained political asylum in Brazil, where he remained with his family for almost three years. (EFE, February 24, 2002) Corporations GM factory in Argentina
waits for economic recovery Wieland confirms that GM has an agreement with the local union that provides employment for a minimum of active workers at the factory. In order to accomplish this, management is anticipating a rotating collective 'vacation time' for employees to be taken at three different times until the market improves. According to Wieland, this year's market expectations for Argentina ranges between a total of 70 to 80 thousand vehicles, which "is half of what it was in 2001, 150 thousand units". For the local GM, the analysis of production will be based on exports. GM in Argentina exports to Chile, Uruguay, Paraguay and Mexico. "It may be that Argentina's Corsa exports to Mexico will be significant. This will depend on the Mexican market" said Wieland. Since then the brand name jeep the Corsa Wagon and Tracker is assembled at the factory. If demand for the new Corsa continues to grow, the assembly factory may decide to import from Argentina, since in Brazil production is concentrated in S�o Caetano do Sul (SP). According to Wieland, "S�o Jos� dos Campos (SP) will only produce the new Corsa". (Gazeta Mercantil, February 15, 2002) (our traduction) MA's Brazil unit buys
Oxsol line from Occidental MA said in a statement that its unit Milenia bought the line, called Oxsol, for $1 million but added that the market for Oxsol is growing and sales are expected to reach as much as $5 million in 2002, mostly in the United States. Oxsol is a solvent used in paints for the auto sector, for electronics products and in the adhesives industry. MA said the deal includes the intellectual property, patents and trademarks of Oxsol, as well as the existing stocks of the product in the United States. The company added that the purchase of Oxsol products was part of the group's strategy to strengthen its activities in North America. The acquisition will be a means to expand the range of uses for Milenia products, which today manufactures the main ingredient in the Oxsol line. (Reuters, February 10, 2002) Mexico sets anti-dumping
tariffs on Brazil steel The Economy Ministry said in the government's Official Bulletin that it would apply the tariffs based on the results of a probe into Brazilian steel shipments to Mexico during 2001. The ministry said the investigation showed that imports of type I steel girders from Brazil were sold at "discriminatory prices'' that had hurt producers of the same product in Mexico. Type I steel beams -- measuring between four and six inches in diameter -- are used in the construction, auto, mining and heavy machinery industries. The duties, which will take affect on Tuesday, include a 72.6 percent tariff on steel beams made by Brazilian steelmaker Gerdau , one of Latin America's leading steel producers, and a 68.5 percent tariff on Belgo Mineira. The measure also assigns a tariff of 80 percent on beams from Barra Mansa. (...)Brazil has already seen its steel exports hit because of anti-dumping duties imposed by the United States, according to the Brazilian Trade and Development Minister Sergio Amaral. The South American nation is the world's No. 8 steel producer and churns out nearly 30 million tonnes of raw steel a year and exports 10 million tonnes. (Reuters, February 11, 2002) Alcan Brazil eyes Latam
food packing market Alcan was taking part in a three-day Latincan 2002 trade show in Rio ending on Friday. It said that the Latin American aluminium can market was the world's fastest growing and expected to expand 7 percent annually over the next four years. (Reuters, February 21, 2002) Brazil adopts defensive
policy on steel imports Under the new policy, customs authorities will thoroughly scrutinize all steel imports, in addition to the usual checking of official import papers at local ports. Some analysts say this may be an undeclared strategy to curb steel imports without the official adoption of tariff barriers or a system of quotas. Brazil imported 1.07 million tons of steel products worth $619 million in 2001, up 14% from the previous year, according to statistics released by the Brazilian Steel Institute. The new measure may affect Japan, South Korea, Taiwan and Malaysia, which supplied some 8% of the steel products Brazil imported in 2001. The Development, Industry and Foreign Trade Ministry has issued a statement declaring the new policy is a ''defensive measure to protect Brazilian steel.'' ''This is a defensive measure, not a protectionist one,'' said Roberto da Fonseca, executive secretary of the ministry's Foreign Trade Chamber. Japan is the No. 1 steel supplier to Brazil among Asian nations, with 37,332 tons in 2000 and 26,487 tons in 2001, according to the Brazilian Federal Revenue. The U.S. government is expected to reach a decision by March on whether to slap quotas or a surtax on steel imports, as the struggling U.S. steel industry is demanding. Steel was the main subject of talks between Brazilian Development, Industry and Foreign Trade Minister Sergio Amaral and U.S. Secretary of Commerce Donald Evans and U.S. Trade Representative Robert Zoellick in Washington in January. (By Lenilson Ferreira) (Kiodo News, February 21, 2002) Bank of America Sues
Former Owners The nation's third-largest bank, based in Charlotte, filed the lawsuit in federal court in Manhattan against Antonio Carlos Braga Lemgruber, Aldo Floris, Lauro Alberto De Luca and several corporate entities in Brazil and other countries. According to court documents, after Bank of America took full control of Banco Liberal and Liberal Banking Corp. last April, it was discovered that Lemgruber had used various entities he controlled and inappropriate accounting entries to accumulate about $38 million in illegal overdrafts and loans. Lemgruber also tried to conceal the embezzlement, the lawsuit charged. The lawsuit also claims that Lemgruber, Floris and De Luca defrauded Bank of America into paying more for Banco Liberal and Liberal Banking Corp. stock than it was worth when the U.S. bank acquired it in a series of transactions beginning in 2000. Bank of America said the scheme did not have any harmful effects on the accounts of its customers in Brazil or the rest of the world. (AP, Frebuary 11, 2002) Nestle in talks to
purchase Brazilian chocolate manufacturer "People working close to Garoto's management have told the union that the company is being sold to Nestle," Mara Lucia Lira, a director at the Food Workers' Union in the state of Espirito Santo where Garoto chocolates are produced, told Dow Jones Newswires. Market analysts said the deal, which would create Brazil's biggest chocolates company, could be worth 1 billion reals (dlrs 412.2 million). The new company would dwarf rival Lacta, which is owned by Kraft Foods' of the United States Garoto has been looking for a buyer amid debt problems and infighting within the controlling Meyerfreund family about its role with the company. The family is divided on whether to continue with Garoto or to sell its stake. Garoto, Brazil's last independent chocolate marker, had sales of 454 million reals (dlrs 187 million) in 2000. Garoto, Nestle and Lacta have market shares of 22.1 percent, 33.8 percent and 33.9 percent, respectively. Other than giving Nestle clear leadership in Brazil, such a purchase comes amid expectations of chocolate sales growth in coming years, analysts say. Union leader Lira said Nestle fended off rival efforts by Britain's sweets and beverages giant Cadbury Schweppes PLC after agreeing to take on labor liabilities. She added that the union expected massive layoffs in Garoto's 3,000-strong labor force. "We are worried about Nestle because it has a habit of making these types of acquisitions to eliminate the competition and eliminate jobs," Dow Jones quoted her as saying. (AP, February 21, 2002) Aircraft trade talks
back on track Top trade negotiators for Canada and Brazil met at the Brazilian consulate in New York for several hours yesterday with a new briefing in hand. The meeting got off on a positive note on the heels of a published interview with Brazil's foreign affairs minister Celso Lafer in Folha de Sao Paulo. "If we could have less financial resources involved in this case, the better ... there are demands from other sectors of our economy which we should attend [to]," Mr. Lafer had said. Speaking to reporters at his Montreal riding office, Mr. Pettigrew said the remarks mustered some good will for yesterday's talks. Both countries have been providing favourable financing for years to clients of their homegrown manufacturers, Bombardier Inc. and Empresa Brasileira de Aeronautica SA [Embraer], respectively. Both sides have also accused the other of creating unfair competitive advantages with the government assistance. After a string of victories for Canada before the World Trade Organization, Brazil won two successive favourable WTO rulings in the past year -- the latest saying Canada acted illegally to provide discount loans to Air Wisconsin Airlines Corp. so it could buy regional jets from Bombardier. Mr. Pettigrew yesterday appeared open to the possibility of extending his own olive branch by not appealing the latest WTO ruling.(...)(Sean Silcoff )(Financial Post, February 09, 2002) "Trade union responses
to globalization: Chile" Summary
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